Dubai's luxury home market reached record levels in 2023, with sales of $10 million-plus homes nearly doubling to $7.6 billion and outstripping global rivals London and New York, according to property consultancy Knight Frank.
While the overall year saw sales in the price bracket rise 91 per cent, almost a third (28 per cent) of the 431 transactions were completed in the final quarter of last year.
Dubai's super-prime market – properties valued at $25 million-plus – also recorded a surge last year, with 56 deals worth $2.3 billion – double the previous year's total.
Knight Frank said twice as many $10 million-plus homes were sold in Dubai than in New York during the first nine months of the year – 323 in Dubai compared with 159 in New York.
The total value of sales in the $10 million-plus market in Dubai reached $5.8 billion in the same period, nearly double second-placed London ($3.2 billion).
The top buyers in Dubai's prime market during the first nine months were from the UK (16 per cent), China (14 per cent), the UAE (12 per cent) and India (7 per cent).
The figures underline that Dubai is the “world’s most active $10 million-plus homes market”, said Faisal Durrani, head of research for Mena at Knight Frank.
“The depth of demand from international buyers for Dubai’s most luxurious homes is also reflected in the fact that citywide listings above $10 million fell by 8.9 per cent last year,” Mr Durrani said.
“Developers are still scrambling to respond to the emirate’s meteoric rise as one of, if not the most sought-after luxury second home markets in the world.
“Indeed, the voracity of international ultra-high-net-worth demand has also supercharged the $25 million-plus, or super-prime market.”
He said Dubai's handling of the Covid-19 pandemic continues to have a positive knock-on effect on wealthy individuals and families, who are choosing to relocate to the emirate.
“Outstanding transport infrastructure, unrivalled global connectivity and an exceptionally forward-thinking leadership have catapulted Dubai’s reputation and status globally, as evidenced by the unrelenting demand from international high-net-worth individuals to own second homes here, or indeed relocate to the emirate,” Mr Durrani said.
“The pandemic has helped to position Dubai as a leading second homes destination.
“Indeed, 66 per cent of global HNWI [high-net-worth individuals] are actively targeting the city’s most expensive homes for use as holiday homes. This has been a key contributor to the city’s emergence as a significant hub for $10 million-plus home sales.”
The Palm Jumeirah, the original iconic palm tree-shaped island, was the most popular for prime sales in Dubai last year. The area accounted for 38.5 per cent of all homes that sold for more than $10 million (166 deals) and 39.2 per cent for properties valued at more than $25 million (22 deals).
Property consultancy ValuStrat, in its recent monthly report, said villa prices on the Palm grew 3 per cent in December, compared to the previous month, and were up 31.9 per cent year-on-year.
Mr Durrani said the Palm Jumeirah has 237 units under construction, accounting for just 0.3 per cent of the 78,000 homes being built across the city.
There are a further 1,438 apartments in the “launched phase” planned for the Palm, which represents 3.4 per cent of all such units in Dubai.
“Of note, however, is there are no villas planned,” he said.
Will McKintosh, regional partner and head of residential, Mena at Knight Frank, said the Palm Jumeirah “has well and truly cemented its status as one of the most desirable addresses globally”.
He added: “The Palm Jumeirah … had 9.5 per cent fewer homes for sale last year than in 2022, reflecting the buy-to-stay and buy-to-hold attitude of the bulk of purchasers.
“The island’s location at the heart of new Dubai and [its] recently achieved prestigious Blue Flag status only adds to its appeal amongst the world’s elite looking for instant access to the ‘Dubai life'.”
Jumeirah Bay Island, the luxury mixed-use project off the coast of Jumeirah, reported 47 sales for units priced at more than $10 million in 2023, while the recently launched Palm Jebel Ali recorded 36 transactions.
In September, Nakheel launched the first tranche of homes on Palm Jebel Ali, centred on four fronds of the island. They all sold out within hours.
Knight Frank said the demand shows local and international appetite to secure a beachfront home on Dubai’s next palm island.
“Inland villa communities are also thriving, with buyers gravitating towards those that offer luxury living in green settings, which now appear to be almost as highly sought-after as homes with water views,” Mr Durrani said.
“This shift in buyer preferences is driving the emergence of new prime areas, such as Al Barari, Jumeirah Golf Estates, Tilal Al Ghaf, Blue Waters and Jumeirah Islands, all of which are on our prime watch list due to the growing proportion of Dh10 million ($2.7 million) sales in these areas.”
To qualify as “prime”, 10 per cent of sales in an area must take place at over Dh10 million for three consecutive years.
For a detailed perspective on the property market, visit: Dubai - VPI Residential Capital Values - December 2023
