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Prices of luxury homes in Dubai rose the fastest globally last year, aided by the high influx of millionaires drawn to the emirate by numerous expat-friendly visa initiatives, according to Knight Frank’s latest wealth report.
For the second year running, Dubai led the Prime International Residential Index (PIRI 100) of Knight Frank, with costs of premium residential properties in the emirate registering a 44.2% growth last year, the highest in the world.
Dubai’s position in the index cements the city’s status as a “second hub for global UNHWIs”, assisted by the UAE’s numerous visa initiatives, Knight Frank said.
The index tracks home prices in 100 markets worldwide. According to the report, Dubai’s price increases are significantly higher than in other markets like Aspen, which came second with 27.6% price growth, Riyadh (25%), Tokyo (22.8%) and Miami (21.6%).
The report said Dubai will grow “rapidly” as a wealth hub. “Dubai has developed a very pragmatic approach to attracting wealthy residents – and has worked hard to correct a perceived area of weakness, namely length of stay,” Knight Frank said.
“Visa options used to be mostly short term and work related, but with the Golden Visa scheme, longer-term residence becomes a possibility.”
High-net-worth individuals have become increasingly mobile since the onset of the COVID-19 pandemic and are interested in buying properties in location that offer opportunities for long stays. In 2022 alone, 13% of UNHWIs were planning to apply for a second citizenship, according to Knight Frank.
UHNWIs owned an average of 3.7 homes in 2022, up from 2.9 in the previous year. Middle Eastern and Asian UHNWIs owned the most properties, averaging 5.3 and 3.9, respectively.
Other key trends
Besides Dubai, other markets, including “sun or ski locations” have caught the attention of millionaires looking to invest in real estate as well.
According to Mark Harvey, Knight Frank’s Head of International Sales, places like Provence, Tuscany, the French Alps and Barbados have been among the “hotspots with no let-up in enquiries” last year.
“The pandemic focused people’s minds on living for today. The transition to hybrid working or, for some, early retirement, made the dream of a bolthole or an upgrade of their existing second home a reality,” Harvey said.
For some wealthy buyers, the appreciation of the US dollar was a major factor, Knight Frank said, citing that some buyers were seeing “double-digit discounts” in properties located in the euro zone last year due to currency shifts.
ANNUAL CHANGE IN LUXURY RESIDENTIAL PRICES IN 2022
(Reporting by Cleofe Maceda; editing by Seban Scaria)
