Dubai ranked third ‘most affordable’ city for prime property
by Parag Deulgaonkar
Dubai is the third “most affordable” global city for purchasing prime residential property, according to Savills.
Though property prices have dropped over the past five to ten years, it still means that investors willing to hold property as an investment for a longer period of time can take advantage of attractive yields, the research firm said in a recent report. Analysis on rental yields revealed Dubai as the fourth “best global hub for returns on investment” (4.6 percent).
“It is a good opportunity for domestic and foreign investors to look at Dubai. Firstly, because the time is right as it is far more affordable to purchase prime residential property now due to lower transactional costs and overall lower prices when compared to other major cities. Investors are paying less for top class specifications,” said Swapnil Pillai, associate, Research Middle East at Savills.
“Secondly, strong rental yields mean that long-term investors could generate robust annual returns when letting out property in the city,” he added.
Prime residential property prices in Dubai fell 1.9 percent in the first half of the year due to an oversupply in real estate market. Prime market prices declined 19.8 percent in the past five-years to $600 per square feet, the report noted.
Meanwhile, price growth across the world's leading prime city housing markets continued to slow during the first half of 2019, rising only 0.4 percent, taking the annual growth to 0.7 percent. This compares to an annual increase of 5.1 percent in the year to June 2018.
“There are a number of reasons why the prime residential markets in global cities are seeing a slowdown, with government policy, the cost of money, increased supply and global economic uncertainty all playing their part,” said Sophie Chick, head of Savills World Research.
“Despite this, we do not expect significant price falls across the index, but that growth will remain flat or experience small increases in value in the medium term,” she added.