Investors are paying less for top class specifications. Secondly, strong rental yields mean that long-term investors could generate robust annual returns when letting out property in the city.”
It is transparent that capital values in Dubai have not grown at the same rate as other global destinations over the past 10 years, but that is not to say that the next 10 years will mirror this. In Dubai, demand is still strong; however, a mismatch of supply and demand has compressed prices. As supply/demand balances out over time, prices will adjust accordingly, so investment towards the bottom of the cycle could be a shrewd move.”
Price growth across the world’s leading prime city housing markets has continued to slow during the first half of 2019, rising by just 0.4%, taking the annual growth to 0.7%. This compares to an annual increase of 5.1% in the year to June 2018.
“There are a number of reasons why the prime residential markets in global cities are seeing a slowdown, with Government policy, the cost of money, increased supply and global economic uncertainty all playing their part,” says Sophie Chick, head of Savills World Research. “Despite this, we do not expect significant price falls across the index, but that growth will remain flat or experience small increases in value in the medium term.”
Latest data from Savills World Cities Prime Residential Index shows that Berlin and Paris have seen stand out growth for prime residential property of approximately 4% over the last six months and 8% over the last year. Both markets have low supply levels coupled with increasing demand from domestic and international buyers.
The six months to June 2019 also marked a turning point for a number of Chinese cities as prices increased following falls during the second half of 2018. This follows a slight loosening of housing restrictions as their economy slows. Hong Kong, which still has the most expensive residential property in the world at US$4,730 per sq. ft. / €45,400 per sqm, saw growth of 1.3%.
Source: Savills Research