Dubai’s luxury home prices rise the most, Hong Kong still the most expensive prime residential market, Savills says
- Certain cities are expected to outperform amid rising interest rates and muted global economic growth, ‘with Dubai forecast to lead the way’: Savills executive
- Prime residential prices in Hong Kong stood at an average of US$4,110 per square foot in the first half
Dubai, the largest city in the United Arab Emirates, saw luxury home prices rise 11.2 per cent to an average of US$800 per square foot in the January-to-June period, compared to prices at the end of December, Savills said. The city is likely to keep its crown for the rest of the year, it added.
On an annual basis, however, the 1.9 per cent rise in overall luxury homes was the slowest since December 2020, Savills said. It defines luxury homes as properties priced in the top 5 per cent of the market in each city.
“The slowdown in sales markets – first recorded in the second half of last year – has continued into 2023, in the face of rising interest rates and muted global economic growth,” said Paul Tostevin, director, Savills world research. “Certain cities are expected to outperform, with Dubai forecast to lead the way with growth of between 6 per cent and 7.9 per cent expected.
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“Buyers are less active amid rising interest rates and a lack of high-quality stock,” the study said. “Best-in-class assets continue to perform well, however, creating an opportunity for new developments in this segment of the residential sector.”
The pace of the increase in Dubai’s luxury property prices in the first half was more than double that of second-placed Mumbai, which recorded a 4.3 per cent increase to US$1,100 per square foot, followed by Cape Town’s 3.3 per cent expansion.
Nine cities including Shenzhen, New York, Paris and Seoul, meanwhile, saw luxury home prices decline by between 0.6 per cent and 3.7 per cent. London was the only city where luxury home prices were unchanged in the period.
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Overall, prime residential prices grew by 1.1 per cent, with 20 cities recording growth of between 0.1 per cent and 11.2 per cent in the period.
Hong Kong’s prime residential prices, at an average of US$4,110 per square foot, are more than one-and-a-half times that of the second-most expensive market, New York at US$2,670 per square foot, Savills said. In the first half of 2023, Hong Kong’s luxury home prices registered a 1.8 per cent rise, and for the rest of the year, they are likely to fluctuate between flat growth and a 1.9 per cent increase.
Cities in the Asia-Pacific region recorded the “strongest levels of prime price growth”, with 10 out of the 13 cities in the region tracked by the index reporting positive price growth. Besides Hong Kong, Mumbai, Singapore and Bangkok, other Asia-Pacific cities that registered higher luxury home prices were Sydney, Tokyo, Shanghai, Guangzhou, Hangzhou and Beijing.
