Dubai, Miami, the first list of the best luxury real estate markets for 2023 | News Bharat

Residential villas on the waterfront of Palm Jumeirah in Dubai on February 24, 2022. Russians were consistently among the top 10 nationalities investing in Dubai property, according to Tahir Majithia, managing partner of Prime Capital real estate based in Dubai.

Christopher Pike/Bloomberg via Getty Images

Wealthy investors betting on luxury real estate would be better off putting their money in Dubai or Miami next year, according to a new report.

In a ranking of 25 of the world’s top luxury or “prime” real estate markets, Dubai topped the list, with prices expected to rise 13.5% by 2023, according to property consultancy Knight Frank. Miami came in second, with a 5% price increase. This was followed by Dublin, Lisbon and Los Angeles, with an expected increase of 4%.

The worst performers next year are expected to be Seoul and London, with prices expected to fall 3% for both. New York was in the middle of the pack, in 13th place, with prices expected to rise 2% next year.

Still, even the strongest luxury markets are expected to cool next year as interest rates rise and economies slow, according to Knight Frank. Across the 25 cities, Knight Frank expects prices to rise an average of 2% in 2023, revised down from the 2.7% forecast by Knight Frank six months ago.

The review suggests that the world’s wealthy, seemingly immune to inflation and the economic slowdown, are holding back on big property purchases or becoming more discerning about prices because of rising interest rates.

“While prime markets are more insulated from the consequences of higher mortgage costs, they are not immune,” the report said. “The transition from a seller’s to a buyer’s market is already underway in most major residential markets.”

Dubai saw prices soar by 50% in 2022, so price increases for 2023 mark a substantial slowdown. Dubai has seen a surge in wealthy residents over the past year, driven largely by Russians seeking a safe haven for their wealth, yachts and real estate amid Western sanctions over the war in Ukraine.

Detached house prices in Dubai rose 13% in October, while overall sales volume rose 73% from a year earlier.

Miami also remains a popular haven for the wealthy, given its low tax rates and the growing number of financial firms locating their headquarters or offices in South Florida.

Although New York’s expected 2 percent increase next year is less than in 2022, many brokers predict prices will decline next year, especially in Manhattan. Knight Frank said New York will benefit from foreign buyers “seeking more, rather than less, exposure to the US dollar as the Federal Reserve raises rates.”

According to the report, Singapore is the only Asian city in the top 10 and one of four cities whose forecasts have increased in the past six months. Singapore is benefiting from a wealth flight from China, as wealthy Chinese citizens move their money, and often their families, to the island to avoid strict Covid lockdowns and a slowing economy.

Cash will be king in all 25 markets as buyers willing to pay all cash will be more attractive to sellers, Knight Frank said. Political and economic volatility in many countries will also lead to a flight to safety in the property sector, “pushing buyers into mature and transparent luxury markets”.

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