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Dubai’s prime residential market has seen growth in capital value far greater than gateway cities such as Singapore and New York in the first half of the year (H1), according to real estate services provider Savills.
The emirate’s residential market has also emerged as the strongest in the Middle East, marking a growth of 2.9% in capital value in H1, the Prime Residential World Cities Index from Savills revealed.
London, Singapore and New York witnessed negative growth.
Dubai, meanwhile, ranked in fifth place in the index of 30 global cities, with Lisbon leading with a rise of 4.2%, followed by Amsterdam, Madrid, and Athens, each with capital value increases above 3% over the same period.
“On a price per sq ft basis, Dubai continues to offer immense value to investors and end-users looking for high-quality, luxurious homes with attractive amenities. Coupled with the lifestyle and connectivity that the emirate has to offer, Dubai continues to be one of the most coveted destinations in the world to live in,” said Andrew Cummings, Head of Residential Agency at Savills Middle East.
Cummings attributed Dubai residential market’s “dream run” to record-breaking transaction volumes and values. “We’re seeing some of the finest brands and developers launching world-class projects in Dubai and the wider UAE to capitalise on the growing demand.”
Outlook for H2
Dubai also topped global rankings in rental value growth, with gains of 12.1%, followed by Bangkok (9%) and Lisbon (7.5%).
Savills attributed this growth to “very strong lifestyle credentials” and an element of corporate relocations which are driving demand in these cities.
Savills said it expects rents to continue to outperform capital values for the remainder of 2024 and in the medium-term as supply continues to remain scarce in many world cities.
“High interest rates continue to contribute to caution in the sales markets and are pushing more would-be buyers into the prime rental markets. However, the potential for interest rate cuts in the second half of the year may encourage those would-be buyers to re-enter the sales market, easing price pressures,” said Kelcie Sellers, Associate Director, Savills World Research.
“Looking ahead, we predict an average capital value growth of 0.5% for the second half of the year, which would bring total 2024 growth to 1.3%,” Sellers added.
(Writing by Bindu Rai, editing by Seban Scaria)
