Dubai, an increasingly favoured destination for the global rich in the post-pandemic era, is poised to attract $2.5 billion this year as high-net-worth-individuals (HNWIs) seek property as an investment asset or as a second home.
According to property consultancy Knight Frank's inaugural edition of Destination Dubai, last year they spent $3.8 billion on homes priced at over $10 million in the emirate.
The consultancy surveyed 183 HNWIs globally, each with a net worth of over $3 million, excluding their main home, or primary residence. Together, this group owns 851 homes around the world and has a combined net worth of $3.2 billion.
The report also highlights the shift in preference from off-plan purchases to recently built/completed homes. Fifty-three percent of HNWI buyers are focusing on acquiring newly constructed homes, rising to 71% amongst HNWIs from East Asia.
Dubai recorded 88 home sales above $10 million, totalling over 6 billion dirhams ($1.6 billion) during Q1 2023, with average transacted prices for such homes reaching AED 7,235 per square feet (psf), representing a 16% increase on 2022’s AED 6,250 psf.
While Dubai’s prime neighbourhoods comprising the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, accounted for 64% of $10 million+ home sales during Q1, other areas are also gaining prominence, the report noted. "They will likely be classed as ‘prime’ if they continue entrenching themselves as high-end neighbourhoods."
"...With the surge in second home purchases, particularly in locations such as Palm Jumeirah, the global elite are paying record prices to secure beachfront villas. They are subsequently spending almost the same amount again on customising these homes, suggesting they will be removed from the natural cycling of homes on the market for a period, mirroring what we see in established markets such as London,” said Faisal Durrani, partner and head of Middle East Research at Knight Frank.
“Indeed, 71% of our respondents with a net worth of over $10 million intend to refurbish or renovate their Dubai residential purchase,” he added.
East Asian buyers display higher spending propensity, with many prepared to allocate over $20 million.
(Writing by Brinda Darasha; editing by Seban Scaria)