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Dubai property market ranked among top 5 globally

Despite rising costs globally, Dubai's property market is forecast to hold for the rest of 2022 Creative Commons
Despite rising inflation globally, Dubai's property market is forecast to hold for the rest of 2022
  • US cities top the list
  • Emirate rates No3 for ‘nomad’ executives

Prime residential property prices in Dubai rose by nearly five percent in the first half of the year, placing the emirate at number four in a new list of the world’s best performing markets.

US cities including Miami, Los Angeles, San Francisco and New York dominated the leaderboard, with Dubai the only non-US city to make the top five, according to data from Savills.

The real estate advisor said the resilience of the world’s residential city property markets continued in the first six months of 2022 with 30 major cities across the world analysed.  

In Dubai prime prices grew by 4.7 percent during the first half of the year and the city is forecast to witness strong capital growth for the remainder of 2022. The growth rate was almost double the average of 2.4 percent seen across the cities covered by the Savills Index.

Along with the other top performers Miami, Lisbon and Cape Town, Dubai benefitted from the renewed appreciation for a warmer climate, higher quality of life and an increased desire for more space, the report said.

Miami held the top spot for prime capital value growth in the first half of 2022, recording a half-year rise of 12.5 percent. Lower taxes and a high quality of life encouraged migration from other US locations, fuelling the city’s success. 

Most global cities are experiencing the impact of geopolitical uncertainty, increasing inflation, and rising interest rates, albeit this is yet to materially impact pricing in the prime markets, the report added.

Helen Tatham, head of prime residential Dubai for Savills, said: “Our study forecasts that the capital value growth across the 30 global cities we monitor will average at 2.2 percent in H2, slightly lower than the 2.4 percent recorded in the first half of the year. 

“Dubai is set to perform the strongest for the remainder of 2022 and factors that work in its favour include the continuously positive changes to policies, the most recent being additional benefits for long-term visa holders, with the opportunity for residents to have a superior quality of life at their fingertips. 

“In addition to a surge in high net worth expatriates choosing Dubai as a new long- or part-time residential location, there is a growing trend of existing residents taking a long-term view on making Dubai their primary home.”

Savills said prime residential rental growth outpaced capital value growth in the first half of 2022, increasing by an average of 3.1 percent. 

In Dubai rents have grown apace, benefitting from the wider lifestyle trends seen in other markets, recording 5.3 percent growth in H1.  

The emirate also emerged as the third best destination in the world for executive nomads in an earlier Savills study, helped by its expansive visa programme, favourable climate, great connectivity and established prime residential market.

Globally, stock shortages and pent-up demand following migration to cities with the reopening of international borders at the end of 2021 continued to fuel growth. 

A revival of corporate travel, purchasers trying before they buy and a prioritisation of the home owing to more remote working are all factors driving the growth in the prime rental markets of the world’s leading cities, Savills noted.

Increasing 8.5 percent during H1, New York reached its highest rents on record, driven by tight inventory and demand for larger spaces, for which renters are willing to pay a premium.

It was followed by Singapore, London, Lisbon, Miami and Los Angeles, all growing at 5.5 percent or above.

Dubai, New York, and Los Angeles were named the highest yielding cities, above 4.5 percent, although these have fallen since June 2021.