Dubai property market registers third highest growth in capital value

Dubai’s housing market was among the best performers in 2021, with the value of prime residential capital in the emirate rising 17.4% over the year, faster than most other global markets worldwide, according to the latest data from Savills.

Growth was the third highest in the world last year, putting Dubai ahead of several real estate hotspots like New York, London, Hong Kong and Paris.

Overall, Miami and Los Angeles lead the rankings for capital values, with annual growth reaching 21% and 20% respectively.

Dubai also took the top spot in terms of rent increases, which averaged 25% in December, the highest among the 30 cities tracked by Savills.

Dubai’s strong performance despite the ongoing pandemic has been attributed to strong demand from buyers looking to own some of the city’s prime real estate.

“Buyers flocked to the city for its competitive pricing, quality of life and warm climate, in addition to the UAE’s successful handling of the COVID-19 pandemic,” Savills said.

“The emirate has seen stunning price growth in the second half of 2021, reaching levels not seen since before the June 2008 financial crash.”

However, Swapnil Pillai, associate director of Middle East research at Savills, said blue-chip capital stocks in Dubai are still undervalued compared to their global peers. He said further price appreciation is expected in 2022, albeit at a “more sustainable level.”

Average core capital value growth in Dubai is expected to reach 6% this year, with strong demand extending into 2022. All other cities except Hong Kong and Paris are also expected to see positive growth in 2022.

Other analysts have said Dubai’s property market could face headwinds this year compared to 2021, although demand will remain robust.

Top 20 cities with the strongest growth in residential capital value in 2021:

Miami: 21.3%

LA: 19.7%

Dubai: 17.4%

Hangzhou: 17.1%

Moscow: 15%

Canton: 14.5%

Seoul: 12%

Shanghai: 11%

Berlin: 9.6%

Sydney: 8%

Singapore: 7.9%

Lisbon: 7.6%

San Francisco: 7.5%

Geneva: 6.5%

Shenzhen: 5.4%

Bangkok: 4.6%

Amsterdam: 4%

London: 2.8%

Milano: 2.8%

New York: 2.6%

(Reporting by Cleofe Maceda; editing by Seban Scaria)

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