Property buyers in Dubai could expect a relief from record prices this year, with market values in the luxury segment forecast to ease.

While the emirate will continue to be the hottest market for prime residential property, growth in capital values is expected to slow to 4% to 5.9% in 2024, compared to 17.4% last year, Savills said in a report on Wednesday.

Price growth in Dubai will be the highest this year after Sydney, which will register a growth of 8% to 9.9% in 2024. Price increases in the emirate, as well as Sydney, will be driven by the influx of millionaires.

“Dubai increased by a significant 17.4% over the year, but it’s likely that this rate of growth will slow this year as it returns to more normal activity,” Savills said.

“Sydney and Dubai are forecast to be the two top performers for the year ahead, with both cities set to benefit from increases in their high-net-worth populations.”

Dubai will remain an attractive destination for property buyers this year, thanks to its world-class infrastructure, as well as safety and security, according to Andrew Cummings, Head of Residential Agency at Savills Middle East. The UAE’s visa reforms, including lower spending requirements to secure a ten-year golden visa, are also attracting investors.

“Dubai is rapidly cementing its status as the number one lifestyle destination. An undersupply of ready property, combined with the development of new high-quality developments, is leading to increased pricing,” Cummings said.

“The diverse nature of Dubai buyers means that demand continues to be robust.”

While prices in Dubai are forecast to increase this year, other major markets like London, Paris, New York and Hong Kong are expected to see declines.

In terms of prices per square foot, however, Dubai remains a far more affordable option.

In Dubai, prime capital values average $750 per square foot as of December 2023, compared to $3,970 in Hong Kong, $2,560 in New York, $1,550 in Paris and $1,920 in London.

(Writing by Cleofe Maceda; editing by Seban Scaria)