Dubai outperformed the global prime residential real estate market in 2022, with a 12.4% increase in capital values, according to the Savills index of prime housing in global cities.
Dubai, Singapore, Miami, and Milan topped the Savills Index for prime housing in global cities in 2023, the real estate company said in its report.
Read more: Dubai real estate poised to grow in 2023 amid luxury demand
Dubai recorded gains in the rental market for prime real estate of 22.9% in 2022, owing to an influx of buyers looking to improve their lifestyle, as Dubai is known for its high quality of life and business-friendly environment, Savills observed.
Prime real estate revenues averaged 3% globally, with the highest rates in Dubai, Singapore, and London, where they increased by 5.3% by 60 basis points in Dubai and 2.9% by 40 basis points in Singapore amid a large influx of international tenants in the two cities. This helped to boost average returns to pre-COVID-19 levels.
Slowdown in 2023
Following two years of staggering growth, many of the prime residential world city markets are set for a slowdown in 2023 with average price growth of 0.5% forecast across the 30 global cities monitored by Savills in its Prime Residential World Cities Index.
Of the 30 major global cities tracked, 17 will record slower capital value growth than in 2022. However, 13 cities are expected to register equal or even slightly enhanced growth in 2023.
Dubai leads the growth
“The regional hubs of Dubai and Singapore are forecast to top the global price growth charts in 2023. Both cities will continue to see sustained inflows of high net-worth individuals, however, they are not immune to higher interest rates and wider economic headwinds. Dubai’s forecast prime price growth of between 6% and 7.9%, for example, is lower compared with the 12.4% growth it recorded in 2022. However, there is still some headroom for growth for Dubai, given its sustained demand levels and lower prime property per sq ft costs compared to other global markets,” said Swapnil Pillai, Associate Director of Middle East Research at Savills.
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