BrazilDubai’s prime residential property market one of the world’s hottest
Dubai’s prime residential market was one of the star performers globally, according to the latest ‘World Cities Prime Residential Index’ by Savills, as buyers flocked to the city for its competitive pricing, quality of life and warm climate in addition to the UAE’s successful handling of the Covid-19 pandemic.
The index by Savills keeps track of the purchase and rental value of prime residential property – the more luxurious and expensive property in the market. More than 30 cities are indexed, including major cities such as New York, Los Angeles, London, Paris, Madrid, Moscow, Shanghai and Sydney, with Dubai the sole representative from the Middle East region.
Across all cities examined, prime capital values grew by 3.2% in 2021, despite the threat of rising interest rates and the continued disruption caused by the Covid-19 pandemic.
Whilst US cities Miami and Los Angeles topped the capital values chart with annual growth reaching 21% and 20%, respectively, Dubai was described by the researchers as the most notable performer, up 17% for the full year but up at an “astonishing rate in the second half of 2021 – levels not seen since before the 2008 financial crash.”
Dubai’s boom was according to the report driven by strong demand which outstripped existing supply, competitive pricing, a successful vaccination program and other successful national government measures, quality of life, affluent buyers investing in property and a growing group of people seeking to move into the premium segment.
Swapnil Pillai, an associate director at Savills said: “The stellar performance of Dubai in our research findings is proof of the successful efforts of the government in making the emirate a destination of choice during the pandemic. Prime capital values in Dubai are still undervalued compared to its global counterparts which will set the stage for further price appreciation in 2022, albeit at a more sustainable level.”
Meanwhile, in the rental segment, Dubai’s was the global leader in price hikes. On a yearly basis, Dubai’s prime residential rents jumped 25%, the highest among the cities tracked. Miami, Moscow, London and Singapore round off the top five.
Pillai: “Prime rental growth has made a staggering recovery in the second half of 2021, creating an ongoing imbalance between supply and demand which is underpinning increased prices.”
Looking ahead, Paul Tostevin, lead author of the World Cities Prime Residential Index, said: “As nations learn to live with Covid-19 and economies revive, prime residential property remains a sought after asset. Despite the threat of market cooling measures, such as rising interest rates, 2022 looks on course to continue the positive trend of 2021. Expected average prime capital value growth across the cities in the index sits at 4.3%, the second highest in five years.”
