Savills, the leading global real estate advisor, released its latest report evaluating the rental values and yields reported for Prime Residential properties across the globe. Among the 30 cities in the Savills World Cities Index, Miami, Moscow, and Dubai recorded the highest levels of rental growth over the first half of 2021. However, the overall results from the report indicate an average increase of just 0.5% across the cities, and a 1.8% drop over 2020 due to global restrictions on travel thereby reducing global demand.
Due to the vast array of development causing a significant oversupply in the market, Dubai rental prices have been on a steady decline over the last 6 years. 2020 witnessed the worst decline with a 12% drop in rents over the city due to travel restrictions and resulting economic decline caused by the pandemic. Based on the findings from the World Cities Prime Index Report by Savills, the Dubai market appears to finally be reaching a turning point. Prime rental prices increased by 5% in the first six months of 2021, driven by a 20% increase in rents across certain villa communities.
Swapnil Pillai, Associate Director Research at Savills Middle East said “Rental markets are likely to remain stable for the rest of 2021. Travel restrictions remain in place between key source markets, causing rental prices to recover more slowly than capital values. However, in the long run, prices are likely to gradually appreciate as economic activity gathers momentum and more job opportunities are created. The further easing up of travel restrictions will be a welcome catalyst for growth.”