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U.S. cities dominate the rankings, with Dubai the only non-U.S. city to make the top five for prime residential capital value growth in the first half of 2022, according to global real estate advisor Savills fourth.
According to Savills, Dubai will be the strongest performer for the remainder of 2022.
In a semi-annual study of prime residential capital values and rents in 30 major global cities, Savills said Dubai had a strong performance in both prime residential capital growth and rental growth assessments for the period to June , as reflected in the Savills Prime Residential Index: World Cities.
capital value
In Dubai, prime prices increased by 4.7% in the first half of the year, and the city is expected to continue to witness strong capital growth for the remainder of 2022.
Meanwhile, capital values grew by an average of 2.4% across the 30 cities covered by the Savills index.
Aided by the influx of HNWIs and the success of its Golden Visa program, the UAE – and Dubai – is expected to continue to attract HNWIs above pre-pandemic levels.
Host a millionaire
According to Henley & Partners, 4,000 millionaires in the UAE are expected to relocate to the country in 2022, four times the 1,000 a year before the pandemic. The emirate continues to channel investment into the city’s infrastructure, improving its leisure and tourism offerings to retain and attract talent and businesses.
Like other top performers, Miami, Lisbon and Cape Town, Dubai benefits from a renewed appreciation for a warmer climate, a higher quality of life and a desire for more space.
Miami tops the list for primary capital value growth in the first half of 2022, with a half-year increase of 12.5%. Lower taxes and a high quality of life encouraged immigration from other parts of the United States, driving the city’s success. North American cities will have the strongest performance so far in 2022, followed by European cities.
geopolitical uncertainty
Most global cities are experiencing the effects of geopolitical uncertainty, rising inflation and rising interest rates, although this has yet to significantly impact pricing in major markets, the report said.
Helen Tatham, Head of Dubai Prime Residential, said: “Our research predicts that capital value growth in the 30 global cities we monitor will average 2.2% in the second half of 2022, down slightly from 2.4% in the first half. The strongest performance for the remainder of 2022 is supported by continued positive changes in policy, most recently a perk for long-term visa holders, giving residents the opportunity to have an exceptional quality of life at their fingertips.
“In addition to the surge of high net worth expats choosing Dubai as their new permanent or part-time residence, existing residents are increasingly looking to Dubai as their primary home.”
Prime residential rental growth
In the first half of 2022, prime residential rental growth outpaced capital value growth, averaging 3.1% in the Savills World Cities Prime Residential Index, while capital value grew 2.4%.
Inventory shortages and pent-up demand continue to drive growth as people migrate to cities as international borders reopen in late 2021. A renaissance in business travel, buyers “try before they buy,” and families prioritizing due to remote work are among the factors driving growth in the prime rental market in major cities around the world.
In Dubai, rents grew rapidly, benefiting from broader lifestyle trends in other markets, recording 5.3%. In an earlier Savills study, the emirate also became the third-largest executive nomadic destination in the world, thanks to its extensive visa program, favourable climate, good connectivity and proven quality residential market.
Highest Rent in New York
New York grew 8.5% in the first half of 2022 to the highest rents on record, as renters were willing to pay a premium for tight inventory and demand for more space. It was followed by Singapore, London, Lisbon, Miami and Los Angeles, all growing at 5.5% or more.
In terms of yields, Dubai, New York and Los Angeles are the highest yielding cities, above 4.5%, although these cities have entered since June 2021. For comparison, the average gross yield index for the 30 cities within the six-month period ending June 2022 remains at 3%.
Swapnil Pillai, Associate Director, Middle East Research, said: “The growth outlook for prime residential rentals remains positive as demand for the types of units sought after by tenants continues to outstrip supply. For those looking to experience a location or accommodation before making a long-term and often expensive commitment, Renting remains a practical but short-term solution. Large living and outdoor areas that facilitate a mixed working model will continue to be a key consideration.”- arab trade news agency
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