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Dubai recorded 948 sales in the luxury property segment, each valued at Dh15 million ($4 million) or more, during the first five months of 2024, according to a new report.
These high-value transactions were concentrated in key areas such as Palm Jumeirah, Mohammed bin Rashid City, Dubai Water Canal, Tilal Al Ghaf and Dubai Hills Estate, the report by property company Betterhomes found.
These locations not only experienced the highest number of luxury property sales but also contributed significantly to the total value of transactions during this period.
A Dh165.6 million sale at Ritz Carlton Residences by MAG in Dubai Healthcare City was the highest-priced primary home sale in the emirate so far this year, according to Betterhomes.
This was followed by a Dh140.5 million sale in Meraas’ Bulgari Lighthouse, Jumeirah Bay, and a Dh140 million transaction in Fendi Casa Canal by AHS Properties in Dubai Water Canal, the data found.
“A truly stand-alone luxury real estate market is a relatively new phenomenon in Dubai and one that only really began to gain significant momentum post-Covid, thanks in part to the government's proactive response to the pandemic,” said Louis Harding, managing director of Betterhomes.
“I expect moderate house price inflation to remain with the continued rise in population and thus demand, due to the attractiveness of the city as a place to live and work, consistent and stable governance at a time of record global elections, the relative undersupply of luxury property, various long-term residency programmes and perhaps most significantly, Dubai's relative affordability compared to other major cities despite significant growth in prices.”
The UAE property market has been booming in recent years on the back of government initiatives such as residency permits for retired and remote workers and the expansion of the 10-year golden visa programme.
Overall growth in the UAE’s economy due to diversification efforts is also supporting the property market.
Dubai's luxury prime market hit a record last year as sales of $10 million-plus homes nearly doubled to $7.6 billion, performing better than London and New York, Knight Frank said in a report earlier this year.
Prices of $10 million-plus homes in Dubai also grew at one of the fastest rates globally at 26 per cent last year, as overseas demand for prime residences in the emirate continues unabated, according to Knight Frank.
The surge in global wealth creation has significantly impacted the Dubai real estate market. As affluent individuals seek to diversify and secure their assets amid geopolitical volatility, Dubai has emerged as a prime destination, according to Betterhomes.
Over the years, the UAE has welcomed 99,000 millionaires, with more than 72,000 currently living in Dubai alone, according to the World’s Wealthiest Cities Report 2024 by Henley & Partners.
The city now boasts the highest concentration of wealthy individuals in the Middle East, with a collective net worth exceeding Dh3.7 trillion.
About 72,500 millionaires, 212 centi-millionaires and 15 billionaires have relocated to Dubai in 2024, according to Henley & Partners.
“Traditionally, cities like London, New York, Singapore and Hong Kong have been the preferred choice for the affluent," the report said.
"However, deteriorating geopolitical situations, significant tax shifts, policy changes and a supply crunch leading to price hikes have prompted the wealthy to look towards Dubai as their new abode."
“The city offers exceptional value for money, providing a higher standard of luxury for the same investment compared to these other metropolitan areas.”
The average property price per square foot in London in the first quarter of 2024 was $824, in New York it was $808, in Singapore $765, in Los Angeles $663, in Toronto $659 and Dubai it was $352.
While these cities have been experiencing immigration-fuelled growth for the past many years, they are also facing significant challenges that hinder their ability to provide value for money in the real estate market, the report said.
One of the primary issues is a massive shortage of homes that cannot keep up with the high demand. This shortage drives prices up, making it difficult for buyers to find properties that offer good value for their investment, it added.
“In contrast, Dubai is actively addressing the supply challenge by adding more high-end homes to its overall stock. Currently, more than 50 luxury projects are under construction, with each unit starting at Dh15 million or higher,” the company said.
Dubai also saw a significant increase in luxury rental transactions from January to May, with 270 contracts for properties with annual rents of Dh1 million or more, according to the report.
The locations dominating this high-end market were Palm Jumeirah, MBR City and Dubai Hills Estate.
The surge in tourists and transit passengers has also increased demand for short-term rental properties, especially luxury holiday homes, the Betterhomes report found.
Many landlords are now considering converting their properties, particularly those with larger layouts and beachfront locations, to capitalise on this growing demand, it added.
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