According to Savills, a real estate services provider, the growth in capital value of Dubai’s prime residential market in the first half of the year (H1) was significantly higher than that of gateway cities like Singapore and New York.
According to Savills’ Prime Residential World Cities Index, the Emirate’s residential market has grown by 2.9% in H1, making it the strongest in the Middle East.
New York, Singapore, and London all saw negative growth.
In the index of 30 global cities, Dubai came in fifth place; the top three cities with increases in capital values over the same period were Lisbon (rise of 4.2%), Amsterdam, Madrid, and Athens.
“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 capitalize on the growing demand.”
Outlook for H2
In terms of rental value growth, Dubai led the world with gains of 12.1%, followed by Bangkok (9%) and Lisbon (7.5%).
Savills credited this expansion to the cities’ “extremely strong lifestyle credentials” as well as a factor related to corporate relocations that are fueling demand.
Savills stated that because supply is still limited in many global cities, it anticipates that rents will continue to exceed capital values for the remainder of 2024 and the medium term.
“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.