Among the 25 largest luxury real estate markets, Dubai ranked first in popularity among wealthy buyers. Demand is so high that in 2023, a 13.5% increase in prices for premium offers in all directions is expected.
The second place was taken by Miami, Florida. The city is projected to grow by 5% in the next 12 months. The TOP-5 most popular destinations were closed by Dublin, Lisbon and Los Angeles - each is projected to increase prices by around 4% in 2023. Wealthy investors and buyers planning to buy a new property in the coming months are advised to pay attention to these five areas.
Among the mentioned 25 global markets, Seoul and London have the worst forecasts — both are expected to drop prices by 3% in the next 12 months. It is also worth noting New York, which in this rating was in the middle of the list with a projected price increase of 2% next year.
Returning to Dubai. The Emirate showed a 50% increase in prices for premium real estate in 2022. In view of this, it is quite obvious that in 2023 the market expects a noticeable cooling. This behavior of the emirate's market is within the framework of a global trend to slow down the growth of demand and prices in the real estate market in general and the luxury real estate market in particular.
On the other hand, it is impossible to ignore some «artificiality» of the current year's indicators for Dubai, given a number of unprecedented events in the international arena. First of all, we are talking about the conflict between Russia and Ukraine, as well as the economic instability that followed, primarily in Europe.
In view of this, since March, Dubai has begun to grow rapidly in terms of sales of not only luxury real estate, but also luxury goods in general, including yachts, berths, cars, furniture, etc. The influx of wealthy buyers from Russia, Ukraine and European countries has not stopped until now. So, in October, prices for family homes increased by 13%, and sales volumes, in annual terms, increased by 73%.
If we turn to the issue of cooling markets, on average, at the global level, prices are expected to rise by 2% in 2023. Six months earlier, the forecast for 2023 was 2.7%. Wealthy buyers, regardless of the country, are beginning to take a more selective approach to the choice of real estate, more often pay attention to inflation, price increases, interest rate hikes.
It is also worth noting that the main means of acquiring real estate next year will be the personal savings of buyers, not credit funds.