Dubai ranks 4th in the world for first-half prime residential capital value growth

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Dubai’s property market remained resilient and ranked fourth in the world for prime residential capital value growth in the first half of the year, with prices rising 4.7% from an average of 2, 4% in 30 cities around the world, with the emirate attracting wealthy individuals and investors following its success. strategy against the Covid-19 pandemic and visa reforms, according to a latest report.

Dubai is the only international city in the top 5 for capital value growth, while the other four positions were achieved by US cities Miami, Los Angeles, San Francisco and New York, according to the Savills Prime Residential Index: World Cities.

Dubai also emerged as 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.

Seoul, Lisbon, Cape Town, Berlin and Milan were also among the top 10 cities in the index. 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, according to the report.

The index also revealed that rental growth in Dubai exceeded 5% against an average of 3.1% in other cities around the world during the first half of the year. With rental growth of 5.3%, the emirate secured seventh position in the Savills World Cities Index Change in Rental Value.

New York, Singapore, London, Lisbon, Miami and Los Angeles took the top six spots while Sydney, Kuala Lumpur and San Francisco were also in the top 10 cities in the Rental Index.

Capital growth continues

The Savills further said that Dubai is expected to experience strong capital growth for the remainder of 2022 due to the influx of high net worth individuals and the success of its Golden Visa program. The emirate is also benefiting from renewed appreciation for a warmer climate, better quality of life and an increased desire for more space.

Helen Tatham, head of Prime Residential Dubai, said Dubai is expected to be the top 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-term visa holders, with the possibility for residents to have a higher quality of life at their fingertips.

Along with an increase in the number of affluent expats choosing Dubai as their new part-time or long-term residence, there is a growing trend for existing residents to consider long-term Dubai as their primary residence, a he declared.

“Our study projects 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 half,” Tatham said.

Referring to the recent report by Henley & Partners, Savills said the UAE is expected to receive 4,000 millionaires moving to the country in 2022. That’s four times the pre-pandemic norm of 1,000 per year, a- he said, adding that 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.

In terms of yields, Dubai, New York and Los Angeles were the most productive cities, above 4.5%, despite having moved in since June 2021. To compare, in the six months to June 2022, the yield average gross for the 30 cities in the index remained at 3%.

Key points to remember

• High-end property prices in Dubai rose 4.7% in the first half of the year compared to an average of 2.4% in 30 cities tracked by Savills

• Only US cities and Dubai ranked in the top five in terms of capital value growth, with Dubai ranking fourth

• Prime residential rent growth outpaced capital value growth in the first half of 2022

• Rent growth exceeded 5% in Dubai, compared to an average of 3.1% in other cities around the world

• Dubai also emerged as the world’s third best destination for executive nomads in a previous Savills study

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