According to the 2024 Sotheby’s International Realty Luxury Outlook Report, Dubai, United Arab Emirates, saw record-breaking sale prices throughout 2023, with super-luxury residences selling for up to US$4,000 (AED14,692) per square foot, marking consecutive year-over-year increases since 2020, noted by Chris Whitehead, managing partner, Dubai Sotheby’s International Realty.

Whitehead notes, for the past two or three years post-Covid lockdowns, high-net-worth buyers have been flocking from continental European countries like the U.K., France, and Germany to relocate to Dubai, in part to benefit from its lack of real estate tax—leading to skyrocketing prices. Last year, Dubai Sotheby’s International Realty sold a penthouse planned at Dubai’s Marsa Al Arab Hotel for US$114 million (AED420 million), followed by an apartment at the Bulgari Lighthouse that sold for US$112 million (AED410 million).

Also in 2023, a megamansion in Dubai’s Emirates Hill neighborhood listed for a record-breaking US$204 million (AED749.3 million) with Dubai Sotheby’s International Realty. “Buyers are coming for the property quality, the value for the money, the cleanliness, and the retail. Dubai was always transient; people came to make money and then left to go back to where they came from. But now, many are moving for the lifestyle and staying,” Whitehead says.

In 2023, average residential prices in Dubai rose 16.9% in the first two quarters, according to CBRE’s UAE Real Estate Market Review, with average apartment prices increasing by 17.2% and average villa prices by 15.1%. Transaction volume for the year to June 2023 also increased by 42.3% year over year during the second quarter of 2023.

Whitehead expects this trend of high demand and escalating prices for luxury properties to continue, as recent political unrest in certain Middle Eastern countries is driving even more buyers toward Dubai for its relative safety and stability.

“There is a shortage of luxury property in Dubai, but in the last three years, the market has started to introduce many luxury products that are currently under development,” Whitehead says.

Branded, service residences are particularly popular. “The ultra-high-net-worth buyers want service and confidence in a recognizable brand name,” Whitehead says. “We just launched the Baccarat Residences in Dubai, which has been extremely successful.” The Baccarat Residences offer two-to-five-bedroom apartments and penthouses beginning at US$4.9 million (AED18 million).

“Many of the world’s most renowned architects and designers want to put their name in Dubai right now,” Whitehead says. “The current flavor of design is very contemporary, very L.A. and Miami, with lots of white, glass, and black framing.” The struggle is in finding prime land in Dubai. “Buyers want the beach lifestyle, not necessarily the city, and the reduced land bank is also pushing the price market up,” he says.

Buyers are looking for individuality and customization, as well as turnkey properties. “They don’t want to come in and build. They can afford to pay to put down their bags and start living,” Whitehead says.

And those same high-end buyers are finding relative deals. “Dubai is already very undervalued for trophy-asset properties,” he says. “Buyers are paying two to three times the price per square foot in London, and Dubai is tax-free. The ultra-high-net-worth individuals of Dubai spend the winter here and the summer in Europe.” 

The future of super-luxury properties in Dubai is positive, according to Whitehead. “There isn’t any sign of slowdown. Supply is short, demand is high, and Dubai isn’t a transitional market anymore. Buyers are coming to stay, and that’s why the market is maturing.”