Dubai’s Rise to the Throne: Outpacing London in Real Estate Investments by 2023
According to a study, Dubai facilitates competitive advantages like higher returns, lower taxes, and more affordable prices to investors, but it also presents challenges like legal complexities, currency fluctuations, and geopolitical uncertainties.
Luxury home prices in Dubai are expected to rise by 6.7 percent to 20.3 percent this year. On the other hand, London’s luxury real estate market is predicted to experience only a jump of 3.5 percent, according to some AI-powered research.
Dubai’s real estate market will be driven by the potential for high annual returns, ongoing projects, and growing occupancy rates. On the other hand, London’s real estate market faces challenges in 2023, majorly because of surging interest rates and high inflation, which are expected to wield downward pressure on growth.
Now, let’s explore both markets in brief.
Dubai Property Market
A recent study suggests that specifically in prime areas of Dubai such as Saga Park, Palm Jumeirah, and Port de la Mer, the off-plan real estate market has been recording significant growth. The study also tells that under-development projects like the large-scale Domakla Guntz project, the exclusive Como Residence Project, and the luxurious URL Infinity offers prime investment opportunities with potential returns ranging from 20-30 percent yearly.
Top-performing areas include Dubai Harbour Part 1, Al Kharaan, and Bluewaters Island, based on the two-year forecast, with the ongoing average prices ranging from AED2,900,000 to AED7,200,000. As a result of the study, price growth is forecast for many areas this year. Hessyan 1 Part 1 would see 20.3 percent growth, Al Barsha 1 Part 1 would have 17.6 percent growth, and Mamzar Part 1 would have 17.1 percent growth.
The areas expected to show strong rental returns in Dubai include Al Nahda Second, Hor Al Anz, and Jumeirah Second Part 1, with growth rates varying between 7.9 percent and 8.9 percent. Real estate occupancy in the city by the end of 2022 was estimated at 73 percent and is anticipated to grow further in 2023.
London Property Market
On the other hand, the London real estate market is predicted to stay stable with limited growth in property prices in 2023. According to some AI predictions, the prime real estate market in London will grow by 3.5 percent this year, demand-driven largely in the luxury sector.
Units with lower price brackets (mostly below £1-2 million) and in less central areas are likely to be affected adversely by the recent rise in mortgage rates, while in central areas like Westminster, Chelsea, and Kensington, more than half investors are cash buyers and thus immune to rise in interest rates. Prices are predicted to remain stable.
London’s charm may be fading for some investors, as properties in non-prime areas are anticipated to face adverse effects because of the rise in mortgage rates. According to the research, London’s real estate market could remain a famous investment destination because of its stable political and economic environment, strong rental returns, and long-term capital appreciation.
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