According to the latest ‘Global Wealth report’ by Knight Frank, Dubai had the biggest increase in luxury home prices during 2021, and Moscow was close behind. Also in the Top 5 are US destinations – San Diego, Miami, and The Hamptons.
The value of Dubai’s luxury homes increased by 44 percent last year, continuing a positive trend that began in the second half of 2020. There were multiple deals worth Dh100 million or more on the Palm, while Bulgari homes and a resort on Jumeira Bay Island garnered record prices.
According to market people, demand for prime homes in Dubai continued to remain strong in January and February this year, and this could see a further spike if more high net worth Russian investments are directed towards purchases in the coming months.
Knight Frank accorded Moscow a second ranking, citing Russia’s mortgage subsidy program and its “tight supply”. The Knight Frank report was conducted before the conflict in Ukraine erupted, which led to the United States and European Union imposing sweeping sanctions against Russia.
‘Relentless’
Faisal Durrani, Partner and Head of Middle East Research at Knight Frank, said: “The relentless demand from the world’s wealthy has fuelled a spectacular turnaround in the fortunes of Dubai’s residential market, with the decisive handling of COVID-19 by the authorities attracting the attention of global investors. In a sentiment-driven market, this has helped to spectacularly mark the start of the city’s third property cycle.”
According to him, “ It’s unlikely the growth of 2021 will be repeated this year, but with such limited prime stock, the top end of the market still has room for growth.”
Dubai’s turnaround came after seven years of negative price growth prior to that. The property values for the wider market are still 30 percent below their 2014 peaks.
What’s in store for 2022?
According to Knight Frank, Dubai, along with Miami, could see more price growth at the top end of the market due to developments such as Emaar’s Dubai Hills Estate, Sobha’s Hartland and its latest project, and Dubai Holding’s City Walk extension and La Mer project.
“Far from running out steam, this year we will see the luxury housing boom endure,” said Liam Bailey, Global Head of Research at Knight Frank. “Dubai, Miami, and Zurich lead our 2022 forecast, with prime prices expected to end the year between 10- and 12 percent higher.
“Asian cities are expected to trail slightly, but even here, prices will grow. Key themes to watch: Agents will complain about stock shortages, buyers will complain about rising taxes and cooling measures, and city markets will be back in demand.”
What are the chances for Moscow? That’s still undetermined at this point, but Russian’s rich are sure to be looking at other locations besides London.