The luxury real estate market is anticipated to experience continued, incremental growth throughout the year. Price performance is likely to normalize, with flat to slightly positive gains across most established luxury markets. While inventory levels are expected to rise gradually, improving overall balance, they are unlikely to shift conditions decisively in favor of buyers.
Interest rates remain influential, though their impact in the luxury segment is nuanced. With U.S. mortgage rates expected to stabilize in the mid-5 percent range and Canada slightly lower, borrowing costs, while well above early-2020s lows, remain manageable for many affluent buyers, who often purchase with cash or use private banking solutions. As a result, rates tend to affect timing and leverage decisions more than overall demand.
Economic fundamentals continue to provide support.
Low unemployment, resilient wage growth among top earners, and relatively strong household balance sheets have preserved confidence among high-net-worth individuals. While inflation and monetary policy uncertainty remain ongoing risks, the luxury real estate market’s insulation from short-term economic shocks continues to be one of its defining characteristics.
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