51ÂÒÂ×

As we look ahead to 2025, the prime residential markets across key European cities and luxury resorts are set to see different levels of price growth although all of the ten markets tracked will register price growth.

Leading the charge is Stockholm, which 51ÂÒÂ× predicts will see a 6% price growth over the next 12 months.

Having experienced a 13% decline from its June 2022 peak, the Swedish capital is now poised for recovery. The Riksbank’s recent interest rate cuts, four in six months, have slashed the policy rate from 4% to 2.75%, improving market sentiment.

51ÂÒÂ×’s European prime residential forecast

Southern Europe: A post-pandemic oasis

Following Stockholm is the Iberian trio of Marbella (5%), Madrid (5%), and (4.5%). These southern European markets are thriving thanks to several factors. The IMF expects the region’s economies to outshine many in the Eurozone, while prime buyers continue to seek lifestyle enhancements post-pandemic. From hybrid work opportunities to sunny climates and top-tier international schools, these destinations are ticking all the right boxes for global investors and relocators.

Monaco: The ultra-wealthy’s safe haven

In fifth place, Monaco is set to achieve 4% price growth in 2025. The city-state’s limited supply underpins its price resilience, while its low-tax environment increasingly attracts ultra-high-net-worth individuals (UHNWIs) as global fiscal pressures push taxes higher elsewhere.

Italy’s rising appeal

Milan secures sixth place with a projected 3.5% growth. The Italian city’s allure lies in its appeal to UHNWIs leveraging Italy’s flat-tax regime. Despite an August increase in the annual levy from €100,000 to €200,000, the market remains robust. Additionally, the upcoming changes to the UK’s non-domicile tax regime in April 2025 could drive more relocation purchases, with many buyers also opting for second homes in the nearby Italian lakes.

Geneva: A safe-haven stronghold

³Ò±ð²Ô±ð±¹²¹â€™s 3% growth forecast reflects its continued status as a safe haven for global elites. With a strong currency, low taxes, and excellent quality of life, the city remains a favourite among UHNWIs. A planned income tax cut in 2025 in the Canton of Geneva will further bolster its appeal.

Paris: Resilience amid turmoil

Despite political instability, Paris is drawing increasing interest from UK and US buyers, driven by a weak euro. Buyers are eager to move forward having put their plans on hold for several years following the 2024 Olympics and France’s general election.

London: Slow but steady recovery

Although London sits at the bottom of the forecast with a projected 2% growth, this would mark its best performance since 2014. According to 51ÂÒÂ×’s Tom Bill, the UK Budget in October narrowed expectations for prime central London from 3% to 2%. Changes in tax policies for overseas investors and entrepreneurs, coupled with higher stamp duties on second homes, are tempering the city’s recovery. See our full reaction to the UK Budget here.

Europe’s overall outlook

Europe faces notable challenges: sluggish economic growth, political uncertainties in France and Germany, and potential US tariffs. Yet, its transparent property markets, excellent accessibility, high quality of life, and world-class schools will continue to attract global wealth in 2025.

For more insights into global trends, read Liam Bailey’s comprehensive Global 2025 Forecast.