Dubai ranks as leading global real estate market for luxury home growth potential in 2024 forecast

Dubai and Sydney are leading gains in the luxury housing sector globally

Dubai and Sydney are expected to see the strongest growth in prime residential property values in 2024, continuing their momentum as top-performing luxury housing markets, a new report found.

Global real estate firm Savills’ annual Prime Global Cities Index tracks capital value changes in premium homes across 30 major cities worldwide. In 2023, Dubai took the top spot with 17.4 percent appreciation. According to the 2024 forecast, both Dubai and Sydney are expected to outpace other global locales with value increases between 4 and 9.9 percent.

Historically low inventory levels coupled with steady demand from high-net-worth buyers are fueling above-average gains in Sydney, said the report. Luxury listings have failed to keep pace with demand, creating upward pressure on prices that Savills predicts will endure through next year.

Dubai’s impressive real estate performance

Dubai demonstrated the most robust performance globally in 2023 but its growth rate is projected to cool slightly as activity returns to a more typical pace. Still, anticipated gains of 4 to 5.9 percent would maintain the emirate’s position among the top two prime residential markets.

“Dubai’s continued success stems from its maturity as a true global city with world-class infrastructure and an unmatched quality of life,” said Andrew Cummings, Head of Residential Agency for Savills Middle East. He cited safety, stability, and a diverse range of property offerings as factors sustaining interest from international buyers.

More broadly, the Index predicts residential values in 2024 will trend upward albeit at a slower pace than last year’s 2.2 percent average rise. The forecast calls for a modest increase of 0.6 percent across the 30 monitored cities. Most are expected to register gains between 0 and 3.9 percent, while seven locales may see small declines.

Sydney recorded 6.8 percent growth in 2023 and remains undersupplied, leaving it well-positioned for further appreciation. With housing becoming more unaffordable, upcoming elections could intensify policy focus on increasing stock to moderate cost increases. Savills estimates values will climb to almost 10 percent this year.

Mumbai and Cape Town joined Dubai as the only cities exceeding 3 percent growth over the past 12 months. Both Indian and South African markets are anticipated to maintain that momentum with increases of 2 and 3.9 percent in 2024.

Continued economic uncertainty, higher interest rates, and weakening consumer sentiment are projected to pressure major American housing centers. San Francisco, hit hard by tech company layoffs and economic challenges, experienced the steepest downturn at -6.1 percent and may see further erosion. New York, Los Angeles, and other coastal US cities may also trend lower.

Some Asian markets could likewise bear the brunt of a risk-averse investment environment. Hong Kong, mired by its zero-COVID policy and political tensions, has fallen 3.7 percent and may extend declines beyond 10 percent if headwinds persist into next year. Nearby Shenzhen and Guangzhou may follow a similar trajectory.

Despite short-term volatility, Savills anticipates that ongoing urbanisation, wealth creation, and changing consumer preferences will underpin long-term property appreciation across established and emerging global hubs. Geopolitical shifts could swing forecasts but overall values are projected to trend modestly higher, with Dubai and Sydney leading gains in the luxury sector.