- Across the 30 cities in the report, capital values grew an average of 3.9% in the first 6 months of 2021
- Dubai among cities to record positive growth in capital value
- The city’s success in dealing with the pandemic and proactive policy measures to revive the economy have played a crucial role in boosting demand for prime housing.
- The availability of good quality stock, low loan rates and relatively affordable real estate prices have led to strong transaction activity which has driven up capital values of prime properties The return of international travel to cities of the world is likely to provide an increased supply of buyers for prime properties
Savills, the world’s leading real estate advisor, has released its latest report analyzing the growth in capital values of prime residential properties around the world. Despite the lingering uncertainty caused by COVID-19, residential real estate markets appear to be holding up well. Across the 30 cities in the Savills World Cities Index, capital values increased 3.9% over a 6-month period ending June 2021, the fastest growth rate since December 2016.
From June 2018 to December 2020, the average growth in capital value in cities was only 0.7%, due to changes in tax policies and overwhelming international uncertainty. The pandemic, which has exacerbated the severity of the slow growth, has caused many properties to shut down completely during lockdowns in many cities.
While nearly 70% of locations affected by COVID-19 have experienced positive capital value growth in the past six months. Cities that have long relied on international buyers in their main markets have experienced negative growth in capital value due to travel restrictions.
With closed offices and the concept of working from home in full bloom, the resulting increased need for space has helped increase the value of capital in places such as Dubai, Cape Town, Moscow and Lisbon. At the same time, transaction volumes are increasing compared to the first half of 2020, when many cities were completely blocked.
Swapnil Pillai, Associate Director of Research at Savills Middle East, added: “The return of international travel is likely to provide an increased supply of buyers for prime properties. In addition, the economic recovery and growth brought about by the rising vaccination rate in UAE is expected to further boost buyer confidence and boost demand. While some degree of pandemic uncertainty remains, the blue chip residential sector is expected to remain strong for the remainder of the year. “