According to a recent report by global real estate consultancy Savills, Dubai is expected to see the strongest growth in its prime residential property market amongst top global cities in 2024. The report analyzed prime residential capital value growth forecasts for 30 major cities worldwide and found that Dubai and Sydney are predicted to be the top performers next year.
Dubai saw prime residential capital values increase by a significant 17.4% over 2023, well above the average growth of 2.2% across the 30 cities surveyed. This stellar performance cemented Dubai’s position as the hottest prime residential market globally last year. However, Savills anticipates that the emirate’s prime property prices will grow at a more modest but still impressive rate of between 4-5.9% in 2024 as activity returns to more normal levels post-pandemic.
Several factors continue to drive robust demand for Dubai’s prime homes. The city remains relatively affordable globally, with average capital values of $850 per square foot. It also offers a low cost of living, warm climate, world-class infrastructure and amenities, safety and stability, and an increasingly business-friendly environment. Dubai’s recent visa reforms expanding the 10-year golden visa program have further increased its appeal as a lifestyle destination for international professionals and investors.
The supply of quality properties also remains constrained, especially as new project deliveries have slowed this year amid higher financing costs and material prices. This imbalance between ongoing strong demand and tight inventory is expected to underpin Dubai’s prime residential market strength over the next 12 months. Other cities like Sydney face similar supply-demand dynamics that will propel above-average price growth, according to Savills’ 2024 forecasts.
By comparison, prime property markets in global financial hubs like New York, London, Hong Kong and San Francisco are predicted to see price declines next year due to economic headwinds like inflation, interest rate hikes and recession risks dampening investor sentiment. Cities highly dependent on technology and startup industries like San Francisco have also felt the brunt of layoffs and funding cuts in the tech sector.
Within Dubai, the emirate’s prime residential hotspots like Palm Jumeirah, Jumeirah Beach Residence, and Downtown Dubai are set to remain the top performers. Properties in these freehold, coastal locations offering world-class amenities have continued appreciating at a rapid pace through 2023. Newly delivered luxury projects in the Downtown area by major developers are also leasing and selling out quickly, underscoring the resilience of Dubai’s high-end property segment.
Looking further ahead, Savills anticipates that Dubai will maintain its pole position as a prime global city for real estate investment and living thanks to its first-mover advantage in developing a business and lifestyle hub. Continuing improvements to infrastructure, facilities, and the business and social environment will help sustain the emirate’s appeal against rising competition from other Gulf and Asian markets. Barring any black swan events, Dubai’s prime residential market looks set for ongoing growth and wealth creation opportunities in the coming years.
