Dubai Poised to Lead Global Luxury Real Estate Market in 2024

According to a recent report, Dubai and Sydney are predicted to have the greatest increases in prime residential property values in 2024, maintaining their status as the best luxury housing markets.

The annual Prime Global Cities Index, published by global real estate company Savills, tracks changes in the capital values of upscale residences in thirty major global cities. Dubai topped the list in 2023 with an appreciation rate of 17.4%. Sydney and Dubai are predicted to outperform other global locations in 2024, with value increases ranging from 4 to 9.9 percent.

Sydney’s above-average gains are being driven by historically low inventory levels and consistent demand from high-net-worth individuals, according to the report. Due to the inability of luxury listings to meet demand, Savills anticipates continued price pressure into the upcoming year.

Dubai’s impressive real estate performance

Dubai had the strongest performance in the world in 2023, but as activity picks back up to a more normal pace, its growth rate is expected to moderate. Even so, gains of 4 to 5.9 percent are expected, which would keep the emirate in the top two prime residential markets.

“Dubai’s continued success stems from its maturity as a true global city with world-class infrastructure and an unmatched quality of life,” said Andrew Cummings, Head of Residential Agency for Savills Middle East. He cited safety, stability, and a diverse range of property offerings as factors sustaining interest from international buyers.

In general, the Index projects that residential values will rise in 2024, albeit more slowly than the 2.2 percent average increase seen last year. A moderate increase of 0.6 percent is predicted for each of the 30 cities under observation. The majority should see gains of between zero and 3.9 percent, but seven locations might experience slight declines.

Sydney is still undersupplied and saw 6.8% growth in 2023, which puts it in a strong position for future growth. The impending elections may sharpen policy attention toward expanding supply to restrain price increases as housing becomes more and more expensive. According to Savills, values will rise to nearly 10% this year.

Mumbai and Cape Town have joined Dubai as the only cities whose growth over the previous 12 months has exceeded 3 percent. It is projected that the Indian and South African markets will continue this trend in 2024, with growth rates of 2 and 3.9 percent, respectively.

Major American housing centers are expected to be under pressure from rising interest rates, deteriorating consumer sentiment, and ongoing economic uncertainty. San Francisco had the steepest decline at -6.1 percent and could see further erosion as a result of economic difficulties and tech company layoffs that severely affected the city. There could be a downward trend in New York, Los Angeles, and other coastal US cities.

A risk-averse investment climate could also hurt some Asian markets. Due to political unrest and its zero-COVID policy, Hong Kong has experienced a 3.7 percent decline, and if the current challenges continue into the upcoming year, it may see a decline as high as 10 percent. Shenzhen and Guangzhou, two nearby cities, might experience a similar course.

Savills believes that long-term property appreciation across established and emerging global hubs will be supported by ongoing urbanization, wealth creation, and shifting consumer preferences, despite short-term volatility. Forecasts could be affected by geopolitical changes, but overall values are expected to trend slightly higher, with Sydney and Dubai leading increases in the luxury market.