Dubai 28th in World Cities Survey

Knight Frank has produced its first ever World Cities Survey in a report published by Citi Private Bank this week. Dubai comes 28th in its ranking of the 40 best global cities to live in.

The survey notes that ‘we expect that the ranking for locations like Dubai (28th), Sao Paulo (24th), Moscow (20th), Mumbai (39th) and Shanghai (21st) will improve over the next few years, as economic growth and development continue’.

Cost comparisons

There is another reason for optimism, also from the research provided by Knight Frank in this report. If you look at the price of residential accommodation per square foot in London ($3,670), Hong Kong ($2,060) then Dubai is far more competitive with villas on the Palm Island said to be selling for $1,000 per square foot these days.

Of course, Dubai will probably never be ranked as the number one best city in the world like London, although it might one day make it past Hong Kong, currently at 14th position. Indeed, the breakdown of the Dubai ranking shows that the city is already doing better on some criteria than others.

Dubai was 18th for economic activity, 35th for political power, 13th for knowledge and influence and 33rd for quality of life.

It is not hard to imagine that the completion of the Dubai Metro and some of the ongoing improvements to the city’s roads will have a dramatic impact on the quality of life in Dubai with an easing of incessant traffic jams. Completion of the world’s tallest building this year, and the Dubai International Financial Centre and Business Bay commercial zones ought to raise its standing in economic activity.

Re-rating due

Then the city could surely be re-rated for political power and knowledge and influence that must be partly linked to economic activity and quality of life. In short, this World Cities Survey is a reminder that buyers of Dubai real estate are buying into a rising star.

It might not feel that way in Dubai at the moment. The global financial crisis only really struck the city last autumn as the oil price crashed and local credit markets became frozen and the currency overvalued. As Knight Frank’s residential property report showed the impact on Dubai in the fourth quarter was devastating with the world’s third worst fall among major cities.

But as any estate agent or property developer will be happy to remind you price falls are also an opportunity. Recovery potential is therefore what you need to see, and Dubai clearly has it.