The United Kingdom’s real estate market is facing a significant threat as thousands of millionaires are relocating to Dubai. This shift has been particularly noticeable in recent years, with the UK experiencing a loss of over 10,000 high-net-worth individuals (HNWIs) between 2017 and 2022. The trend is expected to continue, with an anticipated outflow of another 3,200 millionaires in 2023.
This mass migration of wealth is largely attributed to the UK’s decision to leave the European Union, a move that has had a profound impact on financiers, hedge fund managers, investment bankers, lawyers, and wealth managers. The Brexit effect, as it is often referred to, has made Dubai an increasingly attractive destination for these professionals.
A study by Housearch.com has highlighted the cost benefits of living in Dubai compared to London. The research revealed that housing costs in Dubai are 27.5% lower than in London, and grocery expenses are 17.3% less. To maintain a comfortable lifestyle in Dubai, one would need a minimum monthly budget of $5,500, whereas in London, the same lifestyle would require $7,200. Additionally, property prices and public transportation costs are more affordable in Dubai.
However, the decision to relocate isn’t solely based on financial considerations. Factors such as customs, traditions, gastronomy, recreational activities, and climate also play a significant role in this choice of residence.
As more millionaires depart London for Dubai, experts predict a substantial decline in London’s property prices. An increasing number of landlords are listing their properties for sale, leading to a potential 8 to 10% decline in 2023 and a similar dip in 2024. Capital Economics, a London-based economic research business, has taken a bolder perspective, outlining the potential for a 25% drop if elevated interest rates persist over an extended period.
In conclusion, the allure of London as a prime destination for millionaires worldwide is waning, with Dubai emerging as the new preferred location. This remarkable shift is not only reshaping the demographics of wealth but also threatening the stability of the UK’s real estate market.