An artist's rendition of single detached house. Luxury demand is evolving and developers are eager to adapt.

With affluent consumers seeking an emotional connection and alignment with their values, these demands require real estate agents to evolve.

A report titled "Luxury Unfiltered" by luxury property strategist Daniel Langer indicated this sector must resonate on a personal and emotional level because it focuses on identity, purpose and authenticity.

The research challenges the real estate industry to look beyond traditional definitions, with luxury no longer attached to price tags, prestige or possessions.

WHAT DOES LUXURY MEAN IN 2025?

Daniel Peros, vice-president of global operations at Luxury Portfolio International, a global network of independent real estate brokerages specialising in high-end properties, said luxury was traditionally synonymous with wealth, exclusivity and high prices.

The report noted modern luxury is about emotional connection, identity and values. The segment is not only about what people buy, but what those purchases represent about the buyers.

Mr Peros said luxury is more about experience, meaning and resonance.

"The most important shift in the luxury marketplace is consumers, especially millennials and Gen Z, want to feel something when they engage with a luxury brand," he said.

"These consumers are looking for stories that connect with their personal identity. They want transparency, authenticity and a sense that the brand reflects their beliefs, not just their bank accounts."

HOW SHOULD BRANDS AND DEVELOPERS RESPOND TO THIS SHIFT?

Speaking during his panel discussion at the Global Property Expo in Singapore last week, Mr Peros said brands and developers are being challenged to evolve quickly.

Gone are the days when a logo or a high price was enough -- brands must now cultivate emotional connection and trust.

In luxury real estate, this translates into more than just lavish amenities or square footage -- it's about how a home fits into the buyer's lifestyle and values, he said.

Customisation, sustainability, craftsmanship and the sense of a "story" are becoming key differentiators.

A luxury product or service should feel like an extension of the consumer's aspirations, said Mr Peros. Whether through personal service, exclusivity or storytelling, brands that make clients feel seen and valued will stand out.

For luxury developers, that means understanding what truly matters to clients, be it peace of mind, sustainability, community, or prestige, and integrating that into every touchpoint of the buying experience, he said.

HOW ARE YOUNGER GENERATIONS INFLUENCING THIS TRANSFORMATION?

Millennials and Gen Z consumers not only want to own luxury, but they also want to believe in it. They are driven by their values and they care about where products come from, how they are made, and whether they align with broader issues such as climate change or social equity, said Mr Peros.

These age groups are more digitally engaged and demand fast, personalised and meaningful communication from brands, he said.

The report notes younger buyers are "curators of lifestyle and identity", meaning brands must speak their language, often online, and open two-way dialogues as they expect both exclusivity and accessibility.

WHAT ROLE DOES DIGITAL TRANSFORMATION PLAY IN LUXURY?

Digital transformation is reshaping e-commerce and virtual showrooms as well as influencer marketing and the metaverse. The digital space has become just as vital as the physical one, said Mr Peros.

Brands need to offer seamless, personalised digital experiences that feel as premium and emotionally rich as their in-person counterparts, he said.

For instance, in luxury real estate a virtual tour is no longer about 3D renderings. The process should involve telling a story about who lives in that space, what their life looks like, and what emotions the home evokes, said Mr Peros.

Technology has become a tool for deepening connection, not replacing it, he added.

HOW IMPORTANT IS SUSTAINABILITY?

Sustainability is now a non-negotiable feature for a growing number of affluent consumers, according to the report, which noted buyers want brands to be accountable for their environmental and social impact.

In fact, integrating sustainability can actually elevate the perception of luxury, signalling responsibility, craftsmanship and forward-thinking design, added the research.

In real estate, this might mean energy-efficient construction, sustainable materials, or carbon-neutral operations.

More broadly, sustainability involves telling a story about environmental and social stewardship that aligns with the client's values.

In addition, heritage must be reinterpreted. While innovation and relevance are crucial, there is still strong appeal in craftsmanship and heritage, especially among consumers who appreciate tradition and artistry, according to the report.

Successful luxury brands should blend their rich histories with contemporary relevance, such as combining classic architectural details with smart-home technology, or emphasising artisanal materials while offering customisation, according to this strategy.

IS HIGHER STILL BETTER FOR PRICING IN LUXURY MARKETS?

Price alone no longer defines luxury. While exclusivity and scarcity still matter, buyers are focused on value, which includes emotional, functional and ethical value, noted the report.

A high price must be justified by the product and the story behind it, the service that surrounds it, and the identity it helps the buyer project, according to Luxury Unfiltered.

Some luxury brands are even offering "entry-level" luxury goods that allow broader access while preserving a sense of prestige.

This inclusivity strategy can attract younger, aspirational customers who are not wealthy now, but are loyal long-term prospects, noted the report.

WHAT ARE THE KEY TAKEAWAYS FOR LUXURY DEVELOPERS?

The report identified seven insights for luxury developers. First, luxury has evolved to be about personal meaning, authenticity, and emotional connection, not only wealth.

Emotional resonance is crucial for all luxury brands, including real estate.

Third, the new consumer is value-driven, requiring transparency, sustainability, and alignment with their identity.

High-end experiences must translate across physical and virtual platforms.

Fifth, sustainability signals sophistication, in which eco-consciousness is not a compromise, but a badge of modern prestige.

Craftsmanship and heritage matter, but only if presented through the lens of today's values and expectations.

Lastly, value trumps price by including emotional, social, and ethical values to support the cost of high-end products or homes.

Developers must evolve or risk becoming irrelevant -- it is no longer sufficient to showcase granite countertops and expansive layouts, noted the report.

Agents and developers need to build emotional journeys, create memorable moments, and tell compelling stories around their properties.

They must integrate digital tools smartly and build trust via transparency, demonstrating their product is not only luxurious, but also meaningful, according to this strategy.

Rather than a crisis, these shifts should be seen as an opportunity to deepen relationships, attract new clients, and redefine success in a more human, connected and enduring way.