Dubai stands out as one of the top global cities forecasted to witness the strongest growth in prime residential property in 2024. In 2023, the city experienced a surge in prime residential capital value growth, reaching 17.4%. This growth surpassed the average of 2.2% seen across 30 cities monitored by Savills.
FORECAST FOR 2024
Savills predicts that Dubai and Sydney will be top performers in 2024. Both cities will enjoy an increase in their high-net-worth populations. Dubai will maintain its position as a hot property market, with property prices expected to grow by 4% to 5.9%.
FACTORS DRIVING DUBAI’S GROWTH
Dubai remains competitively priced globally, at $850 per square foot, with a low cost of living and an easy visa process. Its warmer climate continues to attract both international and domestic buyers.
GLOBAL PRIME RESIDENTIAL MARKET TRENDS
Other Asia Pacific cities led capital value growth in 2023, with Mumbai leading the pack. Yet, cities like New York and San Francisco experienced declines due to economic turbulence. Hong Kong's political and economic uncertainty resulted in a 3.7% fall in capital values too.
OUTLOOK FOR 2024
Savills anticipates that prime residential markets in major cities will see modest growth in 2024. Sydney and Dubai are likely to lead this growth because of strong demand and limited supply. As a result, these cities will likely experience increasing property prices.
Savills World Cities Prime Residential Index: 2024 prime capital value growth forecast vs capital growth value in 2023:
Â
Savills Research)
DUBAI’S CONTINUED SUCCESS
Andrew Cummings, who leads the Residential Agency at Savills Middle East, says Dubai succeeds because of its quality infrastructure, safety, and security. He explains that a shortage of completed property and the creation of new, high-quality developments are driving prices up.
RENTAL PERFORMANCE
Dubai also saw rental price increases of nearly 10% in 2023, outpacing the global average of 5.1%. Lisbon led prime rental growth among the 30 cities in the index, increasing by 39% last year.
YIELDS AND COSTS
Dubai stands out with a prime gross yield of 4.8%, higher than the global average of 3.1%. Furthermore, buying, holding, and selling property in Dubai costs less than 10% of the sale price. This makes Dubai a cost-effective option for property transactions, and one of the lowest globally.
In summary, Dubai's prime residential property market is thriving. The market can expect strong growth in 2024. Competitive pricing, high yields, and a favourable economic environment all draw investors to the market. These factors make Dubai an attractive destination for property investment.
