Dubai fourth globally for growth in prime residential capital value


United Arab Emirates – US cities topped the leader board, with Dubai, the only non-US city to make the top five, ranking fourth in prime residential capital value growth in the first half of 2022, according to global real estate advisor Savills.

Dubai is expected to post the best performance for the rest of 2022, according to Savills.

In its semi-annual study of prime residential capital values ​​and rents in 30 major cities around the world, Savills reports that Dubai had a strong performance in both residential capital growth and rental growth for the period. ending in June, as evidenced by the Savills Prime Residential Index: Cities of the World.

Capital values

In Dubai, commodity prices rose 4.7% in the first half of the year and the city is expected to experience strong capital growth for the remainder of 2022.

Meanwhile, across the 30 cities covered by the Savills index, capital values ​​rose an average of 2.4%.

Aided by the influx of high net worth individuals and the success of its Golden Visa program, the UAE – and therefore Dubai – is expected to continue to attract high net worth individuals at higher levels than before the pandemic.

Receive millionaires

The UAE is expected to receive 4,000 millionaires moving to the country in 2022, four times the pre-pandemic norm of 1,000 per year, according to Henley & Partners. The emirate continues to channel investment into the city’s infrastructure, improving its leisure and tourism offerings with the aim of retaining and attracting talent and businesses.

Along with fellow top performers Miami, Lisbon and Cape Town, Dubai has benefited from renewed appreciation for a warmer climate, better quality of life and increased desire for more space.

Miami ranks first for prime capital value growth in the first half of 2022, growing 12.5% ​​half-yearly. Lower taxes and a high quality of life encouraged migration from other places in the United States, fueling the city’s success. So far, North American cities have had the best performance in 2022, followed by European cities.

Geopolitical uncertainty

Most cities around the world are feeling the impact of geopolitical uncertainty, rising inflation and rising interest rates, although this has yet to have a significant impact on prices in blue-chip markets, the report says.

Helen Tatham, Head of Prime Residential Dubai, said: “Our research forecasts that capital value growth in the 30 global cities we monitor will average 2.2% in the second half of 2022, slightly lower than the 2.4 % recorded in the first semester. Dubai is expected to be the best performer for the remainder of 2022 and factors working in its favor include continued positive policy changes, the most recent being additional benefits for long-stay visa holders, with the possibility for residents to have superior quality. life at your fingertips.

“In addition to an increase in the number of affluent expats choosing Dubai as their new long-term or part-time residence, there is a growing trend of existing residents considering long-term Dubai as their primary residence.”

Growth in prime residential rents

Growth in prime residential rents outpaced growth in capital value in the first half of 2022, rising an average of 3.1% across the entire Savills World Cities Prime Residential Index, compared with an increase of 2. 4% of the value of the capital.

Inventory shortages and pent-up demand following migration to cities with the reopening of international borders in late 2021 continued to fuel growth. A revival of business travel, “try before you buy” buyers and a prioritization of the home thanks to more remote working are all factors driving the growth of high-end rental markets in major cities around the world .

In Dubai, rents rose rapidly, benefiting from broader lifestyle trends seen in other markets, registering 5.3%. The emirate also became the world’s third-best destination for executive nomads in an earlier study by Savills, helped by its extensive visa program, favorable climate, great connectivity and established prime residential market.

New York’s Highest Rents

Up 8.5% for the first half of 2022, New York hit its highest ever rents, driven by tight inventory and demand for larger spaces, which tenants are willing to pay extra for. It was followed by Singapore, London, Lisbon, Miami and Los Angeles, all growing by 5.5% or more.

In terms of returns, Dubai, New York and Los Angeles were the highest earning cities, above 4.5%, despite having moved in since June 2021. To compare, over the six months to June 2022, the return Average gross premium across the 30 index cities remained at 3%.

Swapnil Pillai, Associate Director, Middle East Research, said: “The growth outlook for prime residential rents remains positive as the type of units tenants seek continue to become scarce. For those who wish to experience a place or accommodation before making a long-term and often expensive commitment, renting remains a practical albeit short-term solution. Large living and outdoor spaces conducive to hybrid working patterns will remain a key consideration. »

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