Dubai’s luxury home prices sizzle while Hong Kong’s fizzle amid supply glut, high interest rates: Knight Frank

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Prices of luxury homes in Dubai shot up 48.8 per cent year on year and 11.6 per cent quarter on quarter as of June 30, putting the wealthy United Arab Emirates (UAE) city on top of a global ranking for the eighth straight quarter, while Hong Kong fell to 35th spot.

Tokyo occupies the second spot on the list, compiled by property consultancy Knight Frank, with a 26.2 per cent increase, followed by the Philippine capital of Manila with a 19.9 per cent jump.

Hong Kong’s “prime” homes – defined by Knight Frank as the top 5 per cent of the residential market in terms of value – lost 1.5 per cent of their value for the year. In the second quarter, prime prices fell 0.4 per cent from the previous three-month period, Knight Frank said, pushing the city down one spot in the quarterly ranking, which tracks 46 cities around the world.

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“Global housing markets are still under pressure from the shift to higher interest rates,” said Liam Bailey, Knight Frank’s global head of research. “But the latest results … confirm that prices are being supported by strong underlying demand, weak supply following disruption to new-build projects during the pandemic and an ongoing return of workers to cities.”

For the entire year, Dubai is likely to see an overall 14 per cent increase in prime property prices, Knight Frank said.

“Remarkably, prices in Dubai have soared by 225 per cent since reaching a pandemic low in the third quarter of 2020,” the report said. Source: SCMP

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