Dubai continues run of growth; Asian locations round out top five

Dubai led capital value growth again for 2023 as international buyers continued to flock to this Middle Eastern hub. For 2023, Dubai saw capital value increases of 17.4%, more than seven percentage points ahead of the second-place market, though the rate of growth slowed to 5.6% in the second half.

Mumbai claims second place for capital value growth over 2023, as the market witnessed increased traction in the luxury segment. Large bungalows and prime residences were preferred, especially by domestic high-net-worth individuals with newer properties commanding higher prices.

Bangkok, Tokyo, and Sydney round out the top five locations with highest price growth over 2023, with each market seeing demand outstrip supply over the course of the year. Tokyo is a notable standout with increasing in-migration to the city in the post-pandemic era, new prime developments are attracting more buyers, and the market has proved remarkably resilient as one of the only leading global markets which hasn’t seen rising interest rates, further underpinning the residential markets.

Sunny southern Europe

Markets in southern European locations showed resilience in the face of economic volatility, high inflation, and rising interest rates. Athens saw the highest growth in prime residential prices, increasing 4.6% for the year. Cities in Spain and Italy also performed well, with capital values increasing in Madrid (4.0%), Barcelona (3.4%), Rome (3.3%), and Milan (2.5%).

These locations are comparatively lower priced than some northern European counterparts, and coupled with their status as more ‘lifestyle’ locations with warmer climates, they have been able to attract buyers from all over the world. Stock of prime properties in each market remains limited as well, which continues to support pricing.

Northern European locations tended to see lower levels of capital value appreciation over the course of 2023. In Amsterdam, capital values increased by 1.3% in H2, offsetting price falls recorded in the first half of the year. This rebound is likely to continue as the market remains undersupplied and potential buyers are seeing increasing wages across the Netherlands.

North American trends

Miami was the strongest performer of the North American markets Savills monitors in the World Cities index in 2023. Capital values grew by 4.9% as the city continues to attract residents from across the United States and beyond.

San Francisco and New York continue to suffer fallout from the ongoing turbulence in the tech industry, as well as from high mortgage rates, recession fears and financial market uncertainty across the country which sapped market confidence to drive sales, inventory, and prices lower. Los Angeles prices continued to fall during the first half of the year, though a slight positive increase in pricing of 0.8% during the second half of 2023 and forecast growth between -1.9% to <0% may mean that its darkest days are behind it.

_{Read the other articles within Savills Prime Residential Index: World Cities below}