Knight Frank The Wealth Report 2025: Global wealth, property investment, and economic trends

The 19th edition of Knight Frank’s annual Wealth Report offers a detailed look into the evolving landscape of global wealth, property investment, and economic trends shaping decisions among the world’s affluent. The report highlights both challenges and opportunities facing investors, particularly in real estate, at a time when global economic volatility and geopolitical shifts are reshaping markets.

The report notes that despite heightened geopolitical tensions and market disruptions in early 2025, global economic growth is expected to remain steady, with forecasts suggesting it may even outpace the growth of the past two years. Inflation, while still elevated, is gradually easing in developed economies. For the real estate sector, which has seen investment volumes drop by nearly 60% since the peak in 2021 due to high debt costs and rising fixed-income returns, this represents a welcome shift. Recent data shows a slowdown in the pace of decline, with investment volumes rising year-on-year in the second half of last year, pointing to renewed confidence.

Private capital continues to play a critical role in real estate markets. According to Knight Frank, 44% of global family offices are looking to increase their allocations to the sector. This sustained interest comes despite the sector’s challenges, particularly limited supply in both commercial and residential segments. The demand for prime office space is particularly acute; in central London alone, there are 62 active requirements for offices exceeding 50,000 square feet, often requiring waits of up to three years.

On the residential side, the report finds that all G20 nations have failed to meet their annual housing targets for the past five years, contributing to rising house prices and rents and putting pressure on affordability. Yet, this mismatch between supply and demand opens a significant window for investment, particularly in living sectors such as build-to-rent, which accounts for less than 1% of rental stock in major global cities including Tokyo, Paris, and Sydney.

A standout insight from the report is the diversity of investment opportunities. While traditional real estate assets remain in demand, new categories such as data centers, logistics, and luxury residential properties are drawing heightened interest. These sectors are positioned as growth areas not only because of their current performance but also due to the broader economic shifts, including the acceleration of e-commerce and the ongoing transformation of workspaces.

The report also explores broader themes shaping wealth distribution and investment strategies. The United States remains the global leader in wealth creation, accounting for nearly 40% of the world’s wealthy population. While North America and Asia remain dominant, Africa is emerging as a new hub, thanks to its young population, abundant natural resources, and improving infrastructure.

Another major theme is the rising mobility of wealth. Cities such as Miami, Palm Beach, and Aspen are benefiting from this shift, experiencing supercharged growth in their housing markets as affluent individuals seek new residences and investment properties. This growing mobility is matched by government efforts worldwide to attract or control wealth inflows, through tax incentives or regulatory adjustments.

A key dynamic underway is the generational transfer of wealth. Baby boomers still hold the majority of global wealth, but the transition to younger generations is progressing steadily. Knight Frank’s Next Generation Survey and its survey of 150 global family offices show that younger investors increasingly prioritize purposeful and sustainable investments, even as political narratives in some countries, like the United States, show a pivot away from environmental, social, and governance (ESG) goals.

The sustainability agenda is another thread running throughout the report. Climate change concerns are shaping investment decisions in sectors ranging from vineyards and luxury yachts to prime residential markets. The report emphasizes that the future of both luxury markets and commercial real estate will be increasingly defined by sustainability and resilience to climate risks.

For high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs), the report shows continued resilience. In 2024, the number of individuals worth over $10 million grew by 4.4%, with North America seeing a 5.2% increase. This wealth expansion is expected to continue, though it may increasingly be met with regulatory and tax responses, as governments face rising debt levels and budget deficits.

The report also notes shifts in investment priorities. While direct real estate holdings account for around 22.5% of a typical family office’s portfolio, more than 40% are looking to expand these allocations over the next 18 months. Living sectors, logistics, and luxury residential markets lead the demand, with positive price growth forecasted in key luxury residential markets throughout 2025.

Investment strategies are also diversifying across geographies. While some family offices focus heavily on domestic real estate—particularly in markets like the United States, Australia, and New Zealand—others, such as those in Switzerland, Hong Kong, and Singapore, maintain highly international portfolios.

One of the report’s critical cautions is around market bubbles, particularly in sectors like artificial intelligence, which saw dramatic valuation swings following the release of new AI models from China. The report draws parallels to the dot-com boom and bust, warning that while investors may be correct about the transformative potential of new technologies, they often misjudge the timeline to commercial success.

In summary, The Wealth Report 2025 presents a detailed picture of a global investment landscape shaped by resilience, adaptability, and a continued appetite for real estate, even in uncertain times. Private capital is positioned as a crucial driver of market activity, not only in traditional sectors but increasingly in emerging and alternative assets. The report underscores that while risks abound—from geopolitical tensions to shifting regulatory environments—the prospects for those willing to navigate complexity remain strong, with real estate standing out as a sector of both opportunity and challenge.