Study: Dubai Set to Outperform London in Property Investments in 2023

By Staff, Agencies

The real estate market in Dubai is set to outperform that of London in 2023, buoyed by steady growth in property prices and occupancy rates, a latest market research said.

High-end home prices in Dubai are predicted to jump by 6.7 percent to 20.3 percent this year, whereas London’s prime property market, particularly in the luxury sector, is expected to see only an increase of 3.5 percent, the AI-powered research by Dubai-based proptech Realiste said.

Dubai’s property market will be driven by ongoing developments, rising occupancy rates and the potential for high annual profits, while the UK capital’s property market faces challenges in 2023, largely due to high inflation and rising interest rates, which are anticipated to exert downward pressure on growth.

“Despite the differing market conditions, both Dubai and London [property markets] offer unique investment opportunities, depending on investors’ risk tolerance, liquidity needs, and investment horizons,” Realiste said.

The study, however, said for investors, Dubai provides competitive advantages such as lower taxes, higher yields, and more affordable prices, though it also presents challenges such as currency fluctuations, geopolitical uncertainties, and legal complexities.

The Realiste study said the off-plan property market in the Gulf city has been registering significant growth.

The London property market, on the other hand, is expected to remain stable with moderate growth in property values in 2023.

According to the Realiste AI forecast, the prime London property market is to increase by 3.5 percent this year, largely driven by demand in the luxury sector.

In central areas such as Kensington and Chelsea and Westminster, where over half the buyers are cash buyers and thus immune to interest rate hikes, prices are expected to remain stable, while properties in less central areas and in lower price brackets, mostly below £1-2 million, are likely to be adversely affected by recent increases in mortgage rates, the study said.

“With properties in non-prime locations expected to face adverse effects due to increases in mortgage rates, London’s appeal may be fading for certain investors.

“However, the city’s property market could still remain a popular investment destination due to its strong rental yields, long-term capital appreciation, and stable economic and political environment,” the research said.