Dubai Leads Global Luxury Home Price Index with 48.8% Surge in 12 Months

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    Dubai has once again claimed the top spot in the global luxury property market as it marked an impressive 48.8% surge in luxury home prices over the course of 12 months leading up to June. This remarkable growth is highlighted in the ‘Prime Global Cities Index Q2 2023’ report by Knight Frank. The report revealed that this is the eighth consecutive quarter in which Dubai has dominated the index for recording the highest growth in luxury property prices.

    The report disclosed that luxury home prices in Dubai experienced an astounding 225% increase since hitting a low point during the third quarter of 2020, when the pandemic had a significant impact on the real estate market. In comparison, the global average annual prices across the 46 markets covered by the index rose by 1.5% in the 12-month period ending in June. This performance indicates an improvement over the previous quarter, with 57% of the cities witnessing price rises during this period.

    The Prime Global Cities Index, which assesses prime residential prices across cities worldwide, tracks nominal prices in local currency. Following Dubai’s lead, Tokyo and Manila secured the second and third spots with price growth rates of 26.2% and 19.9% respectively. Other cities in the top 10 included Miami, Shanghai, Mumbai, Madrid, Nairobi, Lisbon, and Bangkok.

    Mumbai, which recorded the sixth highest year-on-year growth in prices in Q2 2023, is projected to achieve the highest annual price growth of 5.0% on the Prime Global Cities Index for the year 2024. During Q2 2023, prime residential prices in Mumbai exhibited a growth rate of 5.2% year-on-year. In the same quarter, Bengaluru secured the 20th rank with a 3.6% year-on-year increase, while New Delhi positioned itself at 26th place with a modest 0.2% year-on-year rise.

    Liam Bailey, Knight Frank’s global head of research, explained, “Global housing markets are still under pressure from the shift to higher interest rates – but the latest results from the Knight Frank Prime Global Cities Index confirm that prices are being supported by strong underlying demand, weak supply following disruption to new-build projects during the pandemic, and an ongoing return of workers to cities.”

    The report also highlighted that 14 cities experienced price declines in the second quarter, with Wellington, Frankfurt, and San Francisco being the most affected. Wellington saw the most significant drop with a 15.1% decrease in prices, followed by Frankfurt’s 12.9% decline and San Francisco’s 11.1% drop.

    While some major cities, including London, Hong Kong, Los Angeles, and New York, faced annual price declines, Knight Frank anticipates Mumbai and Auckland to lead the change in prime residential prices in 2024. Both cities are projected to witness a substantial increase of 5.0% in prime residential prices for 2024. Factors such as improving GDP figures, relative value, and investment in infrastructure are expected to be key influencers driving these price hikes.

    Shishir Baijal, CMD of Knight Frank India, noted, “Against the backdrop of sluggish global growth and worries about inflation that defined a significant portion of 2023, the Indian economy stood out as a remarkable achiever.” Despite policy rate hikes in major developed economies, the Indian economy demonstrated resilience and stability in policy interest rates over the past two quarters.

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