Luxury rental prices are set to continue to rise across the world in 2024, with Dubai leading the way in 25 of the 30 cities analysed by the real estate consultancy. Of the 30 cities included in the index, Dubai topped the list of luxury rental growth, with rents in 2024 rising by 23.5% on the previous year, surpassing the peak of 2016.
The 25 cities saw a rise in high-end rents last year, with values rising by an average of 4.3%.
“Luxury residential rents continue to outperform capital values, although falling interest rates mean that the scope for superiority is narrowing,” the real estate brokerage wrote in the report. Dubai is expected to lead the rental growth index in 2025 with a projected increase of more than 10%, said Kelsey Sellers, associate director at Savills World Research. The market has seen increased demand from local and international tenants looking to enjoy the Dubai lifestyle.
With high-net-worth individuals, increasing tourist arrivals and a growing expat population, Bangkok saw rents rise by 15.4%, according to the report. Malaysia’s capital Kuala Lumpur also saw a significant increase in luxury rentals, rising by 12.2% over the year. This price increase can be partly attributed to increased demand for short-term stays in the city, especially with the return of Chinese and Indian tourists due to the visa-free policy.
In Lisbon, luxury rentals have started to stabilize somewhat; After a 30% increase in 2023, rental growth slowed in 2024, particularly in the second half of the year, when rents rose just 2.8%. However, for the full year, rents rose 10.5%. Meanwhile, many potential buyers in major U.S. cities have turned to the rental market amid rising interest rates. New York, Los Angeles and San Francisco saw luxury rents rise by at least 3% in 2024, while Miami reported a 1.6% increase for the year.
As for next year, Sellers, of Savills, expects luxury rental markets to continue to benefit from rising interest rates. For 2025, she says, luxury rents are expected to increase slightly in the 30 cities included in the Global Cities Index, but that growth is likely to remain below the historical average.