Forget NY, Dubai more affordable city
Dubai's prime luxury residential market, a much sought-after destination for the world's super rich, is seven times more affordable than the most expensive real estate in the world, according to the latest data released on Tuesday.
Dubai remains an attractive destination for property investment and ranks in the 10th position, far behind Monaco - now the most expensive city for real estate in the world - says Savills in a report.
In 2016, the average re-sale price in Monaco reached a record high of Dh165,700 per square metres, up 180 per cent in a decade. "This rate of price growth is largely unseen in developed economies, however Dubai displays a wide growth range across prime areas such as The Palm, Burj Khalifa, Emirates Hills and Dubai Marina; and 94 per cent for average villa prices, Savills said in its Spotlight on Monaco.
In terms of world's most expensive cities, as per live work accommodation cost per head, Dubai remained on number 8 while New York, Hong Kong and London secured top three positions.
"Although it is difficult to establish an average prime price for Dubai in the past ten years (given the large variety of products in districts with fundamentally different drivers); we took a closer look at individual areas and noticed that some developments have outperformed top cities in the world such as The Palm," said David Godchaux, CEO of Core Savills.
Rizwan Sajan, chairman of Danube Properties, said Dubai has one of the best infrastructures in the world and offers the most competitive prices in the real estate market as compared to other countries.
"However, I believe due to the huge influx of people coming to the UAE, the demand for property is on an upswing, which will drive the prices of property higher. Moreover, factors such the Expo 2020 and increase in land prices will impact the real estate sector," said Sajan.
Niall McLoughlin, senior vice-president, Damac Properties, said: "Dubai offers some of the most prime properties in the world and in fact you can get seven times more real estate here than most global cities. This, coupled with Dubai's annual rental yields, which are currently anywhere from six to 10 per cent, represents a win-win scenario for investors as Dubai far outperforms other popular investment cities and is one of the best places to invest in real estate."
"Damac Properties has also been at the forefront of bringing to market a wide array of products for customers seeking different choices of attractive and lucrative investment opportunities and meeting the individual needs of a wide range of investors," said McLoughlin.
Ajay Rajendran, co-chairman of Sobha Group, said at today's price levels, Dubai offers extraordinary value with substantial upsides over the next 18-24 months.
"The combination of opportunities and lifestyle that Dubai offers, is unparalleled not just in the region, but even on the global arena," said Rajendran.
"Since 2007, Dubai's market conditions have changed immensely and today we are witnessing prime areas lagging in performance even though the mainstream areas are witnessing a gradual recovery, initiated since first quarter 2016," Savills report said.
Transaction volumes in Dubai continue to be steady across most prominent residential districts with many witnessing double digit year-on-year rise, largely driven by the growing off-plan market, said the report.
In its Dubai market update, Savills said a distinctive trend continues to prevail in both apartment and villa sub-markets. "Although softening for almost two years, the prime segment continues to indicate further contraction in prices while low to mid-segment sub-markets are keeping up a steady increase, having reversed their course since first quarter-2016."
"Despite slight yield compression witnessed over the last 6 to 12 months, Dubai's prime and mainstream residential market continues to be positioned attractively as a real estate investment on the global scene," said Savills.
Knight Frank's 2017 Wealth Report has ranked Dubai fourth in the world on its list of cities with the biggest inflow of high net-worth individuals.
Dubai attracted about 2,000 of the very affluent people in 2015 - growing the local wealthy population by about five per cent, according to the report. The Australian cities of Sydney and Melbourne led the global inflow list.
Dubai is placed 16th on Knight Frank's City Wealth Index, which scores cities worldwide based on four criteria - current wealth, future wealth, investment and connectivity.
Alpha Cities Index, another latest review of prime real estate markets around the world, has ranked the emirate, along with two other cities in the Gulf, as one of the top 50 destinations that the wealthiest are most attracted to.
The study into the buying habits of ultra-high-net-worth individuals - those with a net worth of $30 million or more - showed that Dubai is the most desirable city in the Arab world in which to acquire a luxury apartment or villa.
The Alpha Cities Index, part of the Global Property Handbook by consultant Wealth-X, Warburg Realty and Barnes International Realty, has put Dubai in the 36th position globally, while Abu Dhabi landed the 50th spot and Kuwait the 42nd position. Overall, London took the cake as the most favourite of the ultra-rich. It is followed by New York, Tokyo, Sydney and Paris in the top five.