NEW DELHI: Dubai’s prime residential prices are set to witness the steepest growth globally in 2023, according to global property consultancy Knight Frank’s 2023 Prime Prediction report. The prices are set to rise 13.5 per cent next year as foreign buyers and high-net-worth individuals have shown keen interest to lap up properties in areas such as The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.
“Adding to the city’s appeal is its relative affordability, with prime homes transacting for around $800 per square foot, making Dubai one of the most affordable luxury residential markets in the world,” said Faisal Durrani, Partner – Head of Middle East Research at Knight Frank.
Dubai also has limited housing stock, with the number of new high-end homes planned already failing to keep pace with demand.
Miami is second on the list with a forecast annual percentage change of 5 per cent, followed by Dublin, Los Angeles, Lisbon, Madrid, Paris and Singapore, which are likely to see prices rising at 4% .
Zurich, which has been ranked by other studies as one of the costliest cities to live in, will see prime home prices growing by 3.5%, while Monaco, known as a tax haven for the rich, will see a growth of 3%.
Shanghai and New York are forecast to post 2% increase in prices.
The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices in local currency across 45+ cities worldwide using Knight Frank’s global research network.

Dubai recorded the fastest rise in prime prices with 88.8% increase during a 12-month change (Q3 2021- Q3 2022) while Wellington was the weakest with a decline of 18%. Some of the European cities registered strong performance in prime prices during Q3 2022. Zurich (10.7%), Edinburgh (9.9%), Berlin (9.4%), Dublin (8.6%) and Madrid (5.6%) have all risen up the rankings in the last 12 months despite the drop-in sentiment and the slowdown in the Eurozone’s economy.

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Those markets that registered some of the strongest price rises during the pandemic are well represented amongst this group: San Francisco, Toronto, Wellington, Stockholm, Vancouver, Los Angeles, Seoul, as well as some Chinese mainland cities.
In prime central London (2.7%) prices are now rising at their fastest rate since Q1 2015.
Meanwhile, in New York, the rate of annual growth has dipped to 5.2% from 7.1% last quarter, but it remains well above its average rate of growth over the last five years of -1.2%.
At least 19 cities saw prime prices decline in the three months to September 2022.
The strong performance of some European cities is likely to reflect seasonal demand over the summer, but also a degree of safe haven capital flight. Zurich (10.7%), Edinburgh (9.9%), Berlin (9.4%), Dublin (8.6%) and Madrid (5.6%) have all risen up the rankings in the last 12 months despite the drop in sentiment and the slowdown in the Eurozone’s economy.
“Resilient labour markets, a lack of supply and well capitalised lenders will support prime prices in most markets into 2023. However, the transition out of a sustained period of low lending rates will lead to pinch points in some markets, particularly amongst highly-leveraged prime landlords, potentially adding to stock levels in some cities,” said Knight Frank in its report.
All three Indian cities (Mumbai, Bengaluru and New Delhi) witnessed an increase in average annual prices. . Mumbai moved up from 39th rank in Q3 2021 to 22nd rank in Q3 2022. Bengaluru and New Delhi too witnessed an upward movement in index ranking from 41th rank and 38th rank respectively in Q3 2021 to 27th rank and 36th rank respectively in Q3 2022.
The rise in average prices in Mumbai was recorded at 4.8% year-on-year (YoY), Bengaluru (3.3% YoY) and New Delhi (1.2% YoY) during the 12-month change (Q3 2021-Q3 2022).
Some of the factors supporting price growth are strong market sentiment, adequate affordability, still low interest rates compared to 2019 and a much more stable economy and business environment relative to many developed economies.
“India continues to distinguish itself as one of the most resilient large economies of the world and market sentiments remain strong. While increasing mortgage rates have weighed down prime residential markets globally, the Indian prime residential market has been relatively strong and should be able to sustain the momentum till the end of 2022,” said Shishir Baijal, Chairman and Managing Director at Knight Frank India.