- Across the 30 cities in the report, capital values grew by an average of 3.9% over the first 6 months of 2021
- Dubai among the cities to report a positive capital value growth
- The city’s success in handling the pandemic and proactive policy measures to jump start the economy played a crucial role in driving demand for prime residential
- Availability of good quality stock, low lending rates and relatively affordable real estate prices led to strong transaction activity which drove capital values higher across prime properties Return of international travel to world cities likely to provide an increase in supply of buyers for prime properties
Savills, the leading global real estate advisor, released its latest report analyzing the growth in Capital values for Prime Residential properties across the globe. Despite the ongoing uncertainty caused by COVID-19, residential property markets appear to be holding up well. Across the 30 cities in the Savills World Cities Index, capital values grew by 3.9% over a 6-month period ending in June 2021, the fastest growth rate since December 2016.
From June 2018 to December 2020, the average growth in capital values across cities was only 0.7 %, due to changes in tax policies and overwhelming international uncertainty. The pandemic, which exacerbated the severity of the slow growth, caused many properties to completely shut down during lockdown in many cities.
While nearly 70% of the locations affected by COVID-19 experienced positive capital value growth in the past six months. Cities with a long history of relying on international buyers in their prime markets saw negative capital value growth as a result of travel restrictions.
With offices closed and the work from home concept in full bloom, the resulting increased need for space helped to push up capital values in locations including Dubai, Cape Town, Moscow and Lisbon. Along that transaction volumes are going up in comparison with the first half of 2020 when a lot of cities where in complete lockdown.
Swapnil Pillai, Associate Director Research at Savills Middle East, added “The return of international travel is likely to provide an increased supply of buyers for prime properties. Furthermore, the economic recovery and growth led by increasing vaccination rate in the UAE is expected to further support buyer confidence and boost demand. Though a degree of pandemic-related uncertainty remains, the prime residential sector is likely to remain strong through the rest of the year.”