London, once a prime destination for millionaires worldwide, is losing its allure as the rich are now heading to Dubai in droves.
A remarkable shift has occurred in recent years, with the UK losing over 10,000 high-net-worth individuals (HNWIs) between 2017 and 2022, and an expected outflow of another 3,200 millionaires in 2023.
In contrast, the UAE is set to welcome around 4,500 millionaires this year, a figure much higher than the annual net influx of 1,000 high-net-worth individuals recorded before the pandemic.
The Brexit Effect
According to experts, the UK’s decision to leave the EU played a crucial role in this migration, primarily affecting financiers, hedge fund managers, investment bankers, lawyers, and wealth managers.
A study by Housearch.com revealed that living costs in Dubai are quite lower than in London, with a 27.5% difference in housing costs and a 17.3% difference in grocery expenses.
For example, a comfortable lifestyle in Dubai requires a minimum monthly budget of $5,500, whereas in London, it demands $7,200. Property prices and public transportation costs are also more affordable in Dubai.
More Than Just Money
While financial considerations are important, the choice of residence also depends on other factors like customs, traditions, gastronomy, recreational activities, and climate.
As more millionaires leave London for Dubai, experts predict a substantial decline in London’s property prices. With an increasing number of landlords listing their properties for sale, there is a potential for an 8 to 10% decline in 2023 and a similar dip in 2024, according to some experts.
Capital Economics, a London-based economic research business, has taken a bolder perspective, outlining the potential for a 25% drop if elevated interest rates continue over an extended period.
