Millennials, those born between 1981 and 1996, are emerging as a dominant force in the luxury property market, Sotheby’s International Realty luxury report suggests.
Millennials, now aged 29 to 44, are the second-fastest growing group of homebuyers, surpassing Baby Boomers in 2024 to become the largest group of homebuyers at 38 per cent, up from 28 per cent in 2023 in the US, according to the National Association of Realtors (NAR).
A long-brewing trend
The reported noted that Millennials’ influence in the real estate market has been steadily growing. In 2022, The Washington Post highlighted their impact, particularly in the high-end housing sector. By 2024, Toll Brothers, a Fortune 500 homebuilding company, reported that Millennials comprised 30 per cent of its first-time buyers. This demographic is increasingly leveraging its growing wealth, which is set to expand further as an estimated $84 trillion transitions from Baby Boomers and the Silent Generation to younger generations by 2045. Consulting firm Cerulli Associates projects that Millennials could inherit as much as $27 trillion in that period.
The rise of #PropertyTok
Millennials’ use of social media as a research and inspiration tool is transforming how luxury real estate is marketed. Millennials and Gen Z are four times more likely to make purchases through social media than older generations, according to a 2024 McKinsey & Company report.
[See also: The rise of #PropertyTok]
For many Millennial buyers, the demand is for ‘turnkey’ properties that are move-in ready, complete with amenities like wellness facilities, cold plunges, steam rooms and pickleball courts. This mirrors the growing popularity of ‘wellness real estate,’ which is expected to reach a market value of $887 billion by 2027, according to the Global Wellness Institute.
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The White Lotus effect and global appeal
Television shows and social media are shaping Millennials’ luxury tastes. Diletta Giorgolo Spinola, head of residential at Italy Sotheby’s International Realty, believes hit shows like HBO’s The White Lotus, which featured Sicily in its 2022 season, have sparked increased interest in Italian properties. ‘Two months later, we had twice as many American and British buyers looking there,’ she says. Millennials are drawn to the idea of owning a ‘piece of history’ in locations like Lake Como and Lake Maggiore, where properties blend modern amenities with historic charm.
[See also: Property Broker of the Year Becky Fatemi on ‘never taking no for an answer’]
Italy, in particular, appeals to Millennials due to its quality of life and favorable tax policies. A 2017 flat tax on worldwide income for new residents has encouraged an influx of high-net-worth Millennials. Even with a recent increase to €200,000 (approximately $218,000) annually, this tax remains attractive compared to other European cities like Paris or London.
The global luxury real estate market is proving its resilience in the face of economic shifts, high interest rates, and political transitions, the latest Sotheby’s International Realty report has found.
The wider market
‘Despite global geopolitical shifts and economic fluctuations, the luxury real estate sector has demonstrated remarkable resilience’, according to Philip A. White Jr., President and CEO of Sotheby’s International Realty. ‘High-net-worth individuals (HNWIs) remain confident in premium properties, dedicating up to 32 per cent of their investment portfolios to real estate holdings. Limited inventory in prime locations continues to drive appreciation and reflects the market’s competitive vigour.
White attributes the segment’s vitality to strategic global expansion, including new markets like Anguilla and Poland, enhancing Sotheby’s International Realty’s ability to serve clients worldwide.
‘The financial markets significantly influence luxury home sales, as HNWIs often adjust their real estate investments based on stock market performance, White explained. Despite economic uncertainties, the luxury housing market continues to attract discerning buyers, reinforcing its resilience and long-term value.
