Dubai led a list of 30 markets that had the strongest rental growth during the first half of 2024, underscoring the emirate’s robust property and real estate market that has already defied expectations of a slowdown.
In the Savills Prime Residential World Cities index published on Monday, the real estate firm said Dubai was ahead with a phenomenal 12.1% rental growth, more than three percentage points ahead of Bangkok (9%) that was a new entrant to the list. Lisbon showed 7.5% growth and was placed third in the list.
Savills Plc added that average gross prime yield across the 30 markets currently stands at 3.2% across the cities, up from 3.1% in December. Overall, Los Angeles, New York, and Dubai remain the highest yielding cities with average yields above 5%.
“Dubai and Lisbon have been perennial leaders for growth in their prime rental markets because of excess demand for high quality rental properties but Bangkok is a new entrant,” Kelcie Sellers, associate director, Savills World Research, was quoted as saying.
“Rental demand for prime rental property in the city has risen due to the higher interest rate environment and the return of tourism and expats after the pandemic.”
The report added that across many EMEA markets, demand continues to outstrip supply of prime rental properties which is supporting prime rental price growth across the region.
Interestingly, no EMEA market tracked in the index saw rental prices fall from December 2023 to June 2024.
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Dubai’s outlook
Dubai has seen massive real estate growth and deals worth $74.6 billion were executed in 2023, according to property consultant Knight Frank LLP.
Many saw this as the peak of property demand, serving reminders of the 2008 slowdown before the first three months of 2024 saw another $24 billion worth of property changing hands.
Despite the rental growth, Dubai’s residential properties were deemed relatively affordable compared to other cities in the region, according to the ‘Global Wealth & Lifestyle Report 2024’ published by Swiss wealth management firm Julius Baer Group LTD in June.
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