Dubai retains PIRI 100 crown as property prices rise over 40%

• APAC price growth plummeted from +7.5% in 2021 to +0.4% in 2022
• Resort locations were strongest, both sun and ski
• A weaker Euro drove some buyers to the continent

The latest Prime International Residential Index (PIRI), tracking 100 prime markets across the globe, has recorded 83 price rises, two flat markets, and 15 cities that lost value over the course of 2022.

Part of Knight Frank‘s 2023 edition of The Wealth Report, the latest trends saw ultra high net worths largely attracted to resort locations, with sunseekers pipping the polar opposite (ski resorts) by a mere 0.1 percentage point.

Dubai’s Golden Ticket to the top

The home to the Burj Khalifa, Burj Al Arab, Palm Jumeirah, and more, the United Arab Emirates city remained the top performer for the second year running.

A driver of the city’s attractiveness and strength, The Wealth Report said Dubai took”… a very pragmatic approach to attracting wealth residents – and has worked hard to correct a perceived area of weakness, namely length of stay.” Longer-term options became available with the Golden Visa scheme.

The annual change in luxury residential prices across 2022 for Dubai was 44.2%, with the top ten comprising:

Top 10 rises in luxury residential prices 2022

Source: Knight Frank’s The Wealth Report, Prime International Residential Index.

How did Australian cities fare?

The top-ranked Australian city was the Gold Coast, coming in equal 54th with Toronto. The cities had a 4.1% increase in luxury residential prices.

Melbourne ranked 61st with a rise of 3.5%, Perth ranked 76th with a rise of 1.3%, Sydney ranked 78th with a rise of 1.1%, and Brisbane ranked 82nd with a rise of 0.2%.

Invoking a little Trans-Tasman rivalry – Auckland was ranked 99th with a fall of 19%, with Wellington ranked last, down 23.7%.

What were the 2022 trends in luxury property?

The Knight Frank report found that resorts led the pack, with average price growth for the segment substantial.

Sunseekers took the charge, coastal and rural destinations in sunnier climes recorded average price growth of 8.4%. The top five included Dubai, Miami, Algarve, Bahamas, and Athens. This level of growth is down from 10.2% in 2021.

Marginally behind were ski resorts, recording 8.3% average price growth. Among the top five performers for the ski segment were Aspen, St Moritz, Verbier, Gstaad, and Val-d’Isère. This level of growth is up from 7.2% in 2021.

Among the cities preferred by UHNWs, the top five included Dubai, Riyadh, Tokyo, Miami, and Prague. Cities slowed significantly with the annual price change in 2021 at 8.4%, down to 4.2% for 2022.

There was also a shift to the Americas, with the region seeing a 7% growth. Europe, Middle East, and Africa (EMEA) saw slightly slower growth at 6.5%, with the Asia Pacific region seeing the slowest growth at 0.4%.

While the regional shift for EMEA from 2021 (7.2%) to 2022 (6.5%) was small, the difference between 2021 and 2022 for the Americas and Asia Pacific was night and day. The Americas had 12.7% growth in 2021, while 2022 saw 7%. Asia Pacific recorded 7.5% growth in 2021, with 2022 only 0.4%.

Thought 2022 was business as usual?

The report found that while 2021 saw exceptional growth, the previous report calling it ‘an anomaly’, 2022 saw even higher levels of growth.

Knight Frank’s report found that 2022 posted the highest level of prime price growth on an annual basis since the global financial crisis, up 5.2%.

A duality across 2022 was observed, with a strong first half making way for a subdued second, hampered by inflation, conflict, the flow-on effects of the conflict, and more.

The report also noted that while the usual factors that played into price growth were likely at play, such as wealth preservation, safe-haven capital flight, and supply constraints, one factor was not: the pandemic surge had more left in the tank.

Healthy living, and a weaker Euro

Knight Frank’s Mark Harvey explained that the drivers of strength behind resort locations included the pandemic-induced change in mindsets, now with a greater focus on lifestyle, hybrid working, and more.

He also noted that currency was a catalyst for some, with dollar and dollar-pegged buyers seeing double-digit discounts in the euro zone due to currency shifts alone in 2022.

For full details, please see Knight Frank’s The Wealth Report.