Trade tensions, geopolitical conflict and regulatory changes weighed on buyer and occupier confidence throughout 2025. Despite this, prime residential markets outperformed expectations, supported by chronic undersupply, cross‑border capital flows, and sustained demand for global city environments.

Against a volatile backdrop, prime capital values rose 1.8% in 2025, including 0.8% in the second half of the year, signalling cautious optimism. Second-half capital values outpaced rental growth for the first time since 2021, showing a modest shift in sentiment as rate‑cut expectations firmed. However, rents still led on a full‑year basis, rising by 2.2%, with leasing remaining relevant in a high‑cost, highly uncertain environment.

Articles found in the report

World cities prime residential capital value and rental growth

With capital value growth in 2025 above 6%, Tokyo, Seoul, Dubai, Amsterdam and Cape Town led our global rankings. In these cities, supply constraints in prime neighbourhoods, rising international buyer interest, and robust lifestyle appeal attracted capital. This outperformance reinforces a long‑standing trend in global real estate where top destinations are those that successfully blend global connectivity and high‑quality urban environments.

Across our 30 studied markets, we are forecasting capital value to grow by 1.3% on average in 2026. Price growth in Seoul, Tokyo and Madrid is forecast to exceed 4%, given favourable demographic dynamics and limited availability of high‑quality stock.

The rental market displayed similar underlying strength in 2025. Los Angeles, Hong Kong and Cape Town emerged as the strongest performers, each reporting annual rental increases above 10%, driven by tight supply, sustained leasing demand and shifting lifestyle priorities. Given the flexibility and relative agility renting provides, 21 of the 30 World Cities in the Savills index saw positive rental growth in 2025. 

Prime yields average 3.2%, reflecting a stable income outlook amid rising investor demand for high‑quality, income‑generating assets. As the global economy transitions into a new phase marked by easing inflation, evolving housing policy and moderating interest rates, the interplay between capital values and rents will be central to shaping performance in the prime residential sector throughout 2026 and beyond.

_{Read the articles within Savills Prime Residential Index: World Cities below.}