Dubai's prime residential rental growth continues to be impacted by global financial markets, according to research from Savills.

Savills World Cities Prime Residential Rental Index of 21 cities shows that only seven cities – Los Angeles, Barcelona, Berlin, Tokyo, Hong Kong, Beijing and Shanghai - saw annual rental growth above 3 per cent.

Dubai ranked 21st on the list, with a -2.5 per cent drop in rental values in the first half of the year.

Savills believes that while there had been high levels of new stock in Dubai, but a slowdown in global trade and financial markets continued to suppress rents in the first half of 2019, continuing the trend seen since 2014.

In the year to the end of June 2019, capital values across the Savills index slowed to 0.7 per cent annually, pushing yields up to 3.2 per cent. 

However, while cities are beginning to converge in terms of rental growth levels, yields remain much more widely spread, from Los Angeles and Moscow at 5.2 per cent and 5.0 per cent respectively to just 1.5 per cent for Guangzhou, one of four Chinese cities yielding 1.7 per cent or under. 

Savills World Research Head Sophie Chick said while there are variations at an individual city level, the trend across both prime rents and capital values in leading world cities is broadly stable.

"Very few cities are seeing annual rental growth above 2%, a trend we expect to persist, given prevailing global political and economic headwinds," she said.

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