Dubai Set to Shine in Global Real Estate in 2024

According to the new vision of the Savills Happy World Good Cities Index, Dubai and Sydney are expected to emerge as leaders in the world luxury market in the 2024 region. The annual index carefully tracks changes in the investment value of high-end buildings in thirty major cities around the world.

Dubai came into the limelight with an interest rate of 17.4% in 2023 and will continue to perform well next year with growth expected to be between 4% and 5.9%. This decline should be followed by a return to a more competitive market, but Dubai's appeal remains strong as it is a major international city where infrastructure and quality of life are not up to par. Andrew Cummings, director of residential developments at Savills Middle East, attributes Dubai's continued success to factors such as security, stability and a range of facilities that engage people around the world through shopping.

Sydney and Dubai compete at the same level. Sydney's growth rate will outpace the rest of the world, with an increase of 4% to 9.9%, due to historically low rates and continued demand from high net worth individuals. The city is estimated to grow by 6.8% in 2023, which bodes well for further growth. But challenges arise as luxury brands struggle to meet strong demand, leading to price expectations in the coming years.

An international assessment of major cities paints a broad picture of the property market in 2024 and predicts an increase in house prices, albeit at a slower pace than last year. Forecasts say growth will increase by 0.6% in 30 cities, with most cities expected to see growth between 0% and 3.9%. Although there will be a slight decline in seventh place, the overall outlook is cautiously positive.

In terms of mid-range tech performance, Mumbai and Cape Town are the top cities after Dubai, up more than 3% from last year. This period should continue, and growth in these cities is expected to reach 2% and 3.9% respectively by 2024.

On the other side of the world, leading US housing companies faced challenges such as rising interest rates. Weakening consumer confidence and economic uncertainty. San Francisco led the way with a -6.1% decline, while New York, Los Angeles and other coastal cities are at greater risk of erosion.

Asian business brings sophisticated music to real estate. House prices in Hong Kong fell 3.7% amid political unrest and a zero-Covid policy. If there is competition now, the city could see another drop of up to 10% in house prices. Neighboring cities Shenzhen and Guangzhou are likely to follow a similar path.

As a result, Savills' interest in property is long-term, with continued approval in the city, wealth creation and support for changing clients. While changes in the region and competition in the market will affect forecasts in the short term, the key is still to be wary of a good price, with Sydney and Dubai leading the luxury market.

In summary, the 2024 Savills Happy World Good Cities Index highlights Dubai and Sydney as emerging leaders in the luxury property market, driven by stable economies and sustained demand. Challenges persist in regions like the US and Asia, but a long-term investment approach remains prudent. Sydney and Dubai's resilience and appeal position them favorably despite short-term fluctuations, emphasizing the importance of strategic decision-making in navigating the global property landscape.