"Luxury housing" is a meaningless qualifier. New housing (market-rate) is always a luxury since, guess what, it's brand new! Older housing is inherently more affordable, so it's not that the new housing sells for less, but that its very availability pushes prices elsewhere down comparatively. That "elsewhere" may even be in a completely different neighborhood if the new market-rate housing acts as an amenity that soaks up demand locally - then neighborhoods that have thereby become worse by comparison will be cheaper.