According to a recent report, the property market in Dubai held up well and ranked fourth globally for prime residential capital value growth during the first half as prices increased by 4.7% compared to an average of 2.4% across 30 cities globally as the emirate attracted high net worth individuals and investors as a result of its successful strategy against the Covid-19 pandemic and visa reforms.
According to the Savills Prime Residential Index: World Cities, Miami, Los Angeles, San Francisco, and New York were the other four top-ranked US cities, with Dubai being the only other overseas city in the top 5.
An earlier Savills study also ranked Dubai as the third best place in the world for executive nomads, thanks to its extensive visa programme, favorable climate, excellent connectivity, and established prime residential market.
On the list of the top ten cities were Seoul, Lisbon, Cape Town, Berlin, and Milan. Geopolitical uncertainty, rising inflation, and rising interest rates are having an effect on most global cities, although they have not yet had a significant influence on pricing in the core markets, according to the research.
The index also revealed that Dubai’s rental increase for the first half of the year exceeded 5%, compared to a global average of 3.1%. The emirate earned seventh place at Savills World Cities Index Rental value change with a 5.3% rental rise.
The top six cities on the rental index were New York, Singapore, London, Lisbon, Miami, and Los Angeles, with Sydney, Kuala Lumpur, and San Francisco rounding out the top ten.
Capital growth to continue
The Savills further stated that due to the influx of high net worth individuals and the success of its Golden Visa programme, Dubai is expected to continue to have robust capital growth for the rest of 2022. The emirate also gains from people’s rising desire for more space, improved quality of life, and a warmer climate.
According to Helen Tatham, head of Prime Residential Dubai, Dubai is expected to perform the best for the remainder of 2022 due to a number of factors, including ongoing favorable policy changes—the most recent of which added benefits for those with long-term visas—that give residents the chance to enjoy a higher quality of life.
According to him, there is a growing trend among current residents to consider making Dubai their primary residence over the long term, in addition to a rise in high net worth expatriates choosing Dubai as a new long- or part-time residential location.
“Our study forecasts that the capital value growth across the 30 global cities we monitor will average at 2.2 percent in the second half of 2022, slightly lower than the 2.4 percent recorded in the first half of the year,” Tatham said.
Based on a recent estimate by Henley & Partners, 4,000 millionaires are expected to relocate to the UAE in 2022, according to Savills. This is four times the 1,000 per year pre-pandemic average, it said, adding that the emirate continues to invest in the city’s infrastructure and enhance its leisure and tourism offerings in an effort to keep and recruit top personnel and companies.
Although they only moved in after June 2021, Dubai, New York, and Los Angeles had the highest yielding cities, with yields of over 4.5 percent. In contrast, the average gross prime yield for the 30 cities included in the Index stayed at 3% in the six months leading up to June 2022.
- During the first half of the year, Dubai’s prime property values increased by 4.7 percent, above the 2.4 percent average growth rate for the 30 locations Savills monitors.
- Only two cities—the US and Dubai—made the top five in terms of capital value growth, with Dubai coming in at number four.
- In the first half of 2022, the increase of prime residential rentals surpassed the growth in capital values.
- Dubai’s rental increase exceeded 5%, compared to the global average of 3.1% for other cities.
In a previous Savills survey, Dubai was ranked as the third best place in the world for executive nomads.