The top three markets for rental growth in the first half of this year are Dubai, Bangkok and Lisbon, according to Savills Prime Residential Index: World Cities – Rents and Yields report.
Dubai (12.1%) and Lisbon (7.5%) have been perennial leaders for growth in their prime rental markets because of excess demand for high-quality rental properties.
Across the 30 world cities, prime gross yields moved out by 10 bps in 2023 to 3.1%, as global rental markets recorded stronger growth than the sales markets.
Driven by a combination of rising rents and falling capital values in the wake of the local ‘mansion tax’ saw Dubai rising to 5.0% (+30 bps), where strong rental growth is pushing yields up.
“Supply is expected to remain tight in many world cities due to several factors, such as high construction costs and development challenges.
“These factors contribute to the limited availability of prime residential rental stock and the upward pressure on rental prices.”
Savills Prime Residential Index: World Cities – Rents and Yields, report
This news comes as Dubai rents are to rise by 10% by end of 2024. In the first half of the year, some areas of Dubai saw increases of over 20%.
This indicates that Dubai is becoming an ever more popular destination for people in the rental and purchasing markets. Dubai rents increasing shows demand is outstripping supply.
The areas that have been hit with the largest increases in the first half of 2024 were Jumeirah Beach Residence (JBR), Town Square, Dubai Production City, Dubai Healthcare City 2 and Meydan. These areas were being met with a 21% to 22% jump in rentals.
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