Dubai: Investors are returning back to buying or renting luxury homes in Dubai – but they are doing so at a good deal.
Currency, renting out a $10,000 a month luxury home will give access to a 4,800 square feet home in Dubai. This is against the 1,500 square feet a similar amount will fetch in Hong Kong – the world’s most expensive real estate market, as per the latest update from Knight Frank, the consultancy.
Just five or six years ago, $10,000 would have got only about 2,000 square feet in space in this city, but excess supply and lower demand in the previous two years have decreased the rents.
Faisal Durrani, Head of Middle East Research at Knight Frank, said: “Concerted efforts by the government to stimulate economic activity and deliver one of the world’s leading vaccination rollout programs have begun to instill confidence in the market, with average property values rising by 0.7 percent during Q1-2021, the strongest rate of growth since the summer of 2016.
“It is worth noting however that luxury rents grew by 1.8 percent during March 2021, the first increase in 12-months and the strongest rate of growth since October 2013, suggesting that the window for securing luxury “bargains” may be on the cusp of reversing.”
Different speeds
But not all luxury real estate places are faring equally. Rents in prime central London and Manhattan both decrease 14% in the year to February, as per the Knight Frank.
“The rate of rental declines is slowing and new lease signings are recovering in both markets,” the consultancy adds. “Motivated by large discounts, prime tenants are making their move back into some city centers hopeful of shorter commutes post the pandemic.
“Whilst domestic demand looks to be strengthening in some cities, the easing of travel restrictions will be the key determinant for the recovery of prime rental markets globally.”