Dubai saw capital values for prime residential properties increase by 4.2% in H1 2021, according to the latest from Savills. The growth beats the global average of 3.9% recorded by a total of 30 cities surveyed in the Savills Prime Index: World Cities – Capital Values report.
Demand for prime residential properties largely stemmed from the city’s handling of the pandemic, and strong policy support for the economy, the report said. Further, availability of good quality stock, low lending rates and affordable real estate prices helped to drive “strong transaction activity” among prime residential properties.
Meanwhile, revitalised international travel may result in an increased supply of buyers for prime residential properties, Swapnil Pillai, Associate Director Research at Savills Middle East, said.
“Furthermore, the economic recovery and growth led by increasing vaccination rate in the UAE is expected to further support buyer confidence and boost demand. Though a degree of pandemic-related uncertainty remains, the prime residential sector is likely to remain strong through the rest of the year,” Pillai added.
GLOBAL PRIME RESIDENTIAL PROPERTIES REGISTER FASTEST GROWTH IN CAPITAL VALUES
This is the fastest growth rate registered for prime residential global capital values since December 2016, the report said. Between June 2018 to December 2020, average growth in capital values slowed significantly, registering 0.7%, due to changes in tax policies, global volatility, and the pandemic.
The global surge is attributed to record-low interest rates over a period, improved buyer confidence, increased transactions at greater prices, and economic stimulus measures.
Overall, of the 30 surveyed cities, 21 posted positive results.
International travel-dependent cities saw negative capital value growth for prime residential properties due to travel restrictions, the report said. At the same time, the need for space due to the work from home concept bumped up prime capital values in Dubai, Cape Town, Moscow and Lisbon.
Chinese cities registered the highest six-month capital value growth, ranging from 7.9% in Guangzhou, to 13.7% in Shanghai. Tightened financing and local policy changes, alongside lending-driven purchases in recent years, are fuelling a rapid price growth in the country, the report said.
Elsewhere, London registered an increase in capital values of prime residential properties for the first time after six years of drops and a flat 2020, the report said.
Meanwhile, Paris and Mumbai recorded negative capital value growth due to lower transaction volumes as a result of prolonged lockdowns and oversupply.
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