Dubai is the 3rd most preferred city for home buyers of the world

By Rahul Vaimal, Associate Editor
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Thanks to affordability and relatively high yields compared to its global peers, Dubai maintains its appeal as one of the world’s most preferred prime residential destinations for investors, according to Savills – a global real estate advisor.

According to the Savills World Cities Prime Residential Index, Dubai has been ranked the third most affordable city in the world to buy prime residential property for the second consecutive year. Cape Town and Kuala Lumpur grabbed the first and second places in the list respectively.

The average price per sq ft of a prime residential property in Dubai has decreased to $560 in the first half of the year, down 7.5% year-on-year compared to the average price per sq ft of $270 in Kuala Lumpur and $260 in Cape Town, according to Savills’ first-half index.

Dubai’s capital and rental prices have experienced a downward trend over the first six months of 2020, along with a few other global cities. This is due to an imbalance in supply and demand resulting in increased attractiveness for international investors searching for investment-grade residential properties.

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Swapnil Pillai, Associate Director, Research Middle East, Savills.

“At an average $560 per sq ft, Dubai offers great value for international investors looking for investment-grade residential assets and relatively high yields compared to its global peers. The associated cost of purchasing a property is low at circa seven per cent, compared to other established and emerging hubs where it can reach anywhere between 15% and 35%.”

In the first six months of 2020, only nine out of the 28 cities studied saw significant movements of prime capital value. Markets with strong domestic demand and limited supply have been able to survive better.

Despite a 6.8% decrease in value, Hong Kong maintained its position as the most expensive prime residential property at $4,440 per square ft. Seoul, Moscow and Berlin exhibited the highest growth in prime value over the past six months. While Lisbon, Moscow, Amsterdam, and Seoul are powered by strong growth, Berlin, Paris, Miami, and San Francisco are expected to be on track for five-year growth, according to Savills.