- Across the 30 cities in the report, capital value grew by an average of 3.9% in the first 6 months of 2021
- Dubai between cities to report positive capital value growth
- The city’s success in tackling the pandemic and proactive policies to jump-start the economy played a critical role in boosting demand for first-class housing
- The availability of good quality stocks, low lending rates and relatively affordable real estate prices led to strong transaction activity driving up the capital value of prime properties. first-class features
Savills, the leading global real estate advisor, has released its latest report analyzing the growth in Capital values for Prime Residential properties around the world. Despite the ongoing uncertainty caused by COVID-19, housing markets appear to be holding up well. In the 30 towns in the Savills World Cities Index capital values grew by 3.9% over a 6-month period ending June 2021, the fastest growth rate since December 2016.
From June 2018 to December 2020, average capital value growth in cities was only 0.7% due to changes in tax policy and overwhelming international uncertainty. The pandemic, which exacerbated the severity of the slow growth, caused many properties to be completely closed during the lockdown in many cities.
While nearly 70% of the locations affected by: COVID-19 experienced positive asset value growth over the past six months. Cities with a long history of relying on international buyers in their key markets saw negative capital value growth due to travel restrictions.
With closed offices and the concept of working from home in full bloom, the resulting increased need for space helped boost capital values in locations such as Dubai, Cape Town, Moscow and Lisbon. At the same time, transaction volumes are increasing compared to the first half of 2020, when many cities were in full lockdown.
Swapnil Pillai, Associate Director of Research at Savills Middle East, added: “The return of international travel is likely to lead to an increased supply of buyers for premium properties. In addition, the economic recovery and growth, led by increasing vaccination coverage in the UAE, is expected to further support buyer confidence and boost demand. While some degree of pandemic-related uncertainty remains, the prime residential sector is likely to remain strong for the remainder of the year.”