Demand for luxury real estate in Dubai continues to surge

Faisal Durrani | Partner, Head of Middle East Research at Knight Frank Middle East. Faisal has over 15 years' experience in property, specialising in providing consultancy and strategic advisory services to a range of global clientele, including investors, landlords, developers, HNWI, banks and institutions. His knowledge and experience spans all real estate sectors and includes markets across the Middle East and West Africa and Faisal is a well-known commentator in various top tier global media outlets and publications. He speaks regularly at industry events, including at conferences across the region as well as the UK, Europe and Nigeria.

Prime and Super-Prime transaction volumes continue to grow in property hotspots such as the Palm Jumeirah, as the luxury home sales increase in Dubai mirrors emerging trend seen in global cities, such as London

  

Dubai has seen a strong surge in demand for super prime homes, valued at over 20 million dirhams ($5.4 million). We at Knight Frank have seen both enquiries and transactions steadily rising. The number of 20 million dirhams plus home sales recorded in May across the emirate is the third highest monthly total ever recorded - the record is 78 home sales in this price bracket, set during the summer of 2009. March (24) and May (22) 2021 have set the highest and second highest record for the number of 20 million dirhams plus home sales on the Palm Jumeirah, highlighting the appeal of the location to wealthy global buyers.

At a time when the world's property markets are still finding their feet following the crippling impact of the pandemic, luxury homes in Dubai remain in very high demand. Dubai's decisive handling of the pandemic, being one of the first locations in the world to return to some semblance of normality and its relatively affordable luxury homes, especially when compared to London, New York and Singapore, where a million dollars buys you five times less space, means we expect demand for super prime homes to continue rising. Indeed, as more global economies reopen and 'revenge spending' ensues, Dubai's ultra-luxury homes are expected to remain a prime target amongst the world's wealthiest.

The world’s super wealthy have been snapping up ultra-luxury homes in places such as the Palm Jumeirah. During May alone, there were 35 sales of homes priced at over 20 million dirhams across Dubai, almost two-thirds of which were on the Palm Jumeirah.

Dubai Prime Residential Market

We are also continuing to see the sale of prime residential homes priced at over $10 million rising sharply in Dubai, with 22 sales of homes worth more than $10 million between January and May, compared to a total of 19 last year. Even if we step back to the period before the pandemic, the number of home sales in this price bracket so far this year is at the highest level since 2015. Home buyers are clearly oozing with confidence when it comes to the emirate’s uber luxury homes market.

The majority of the transactions in the $10-million dollar plus range has been for homes on the Palm Jumeirah, where the most expensive home to sell this year was a $30.3 million villa. Overall, the most expensive deal so far this year was on Jumeirah Bay Island, where a European buyer purchased a home worth $32.9 million in July.

The rebounding of Dubai’s prime market echoes a wider global trend, signalling the start perhaps of a ‘Roaring Twenties’ for global real estate. With over 42,000 million-dollar homes, Dubai is second only to London, where luxury home sales have also rebounded since the start of this year.

Conclusion

Dubai remains the epitome of lifestyle living, and the surge in interest at the current time reinforces its appeal with wealthy buyers looking for well designed, luxury homes with a beachfront location. The overriding sentiment in both the super-prime and prime sectors is certainly one of positivity, with global buyers continuing to see the appeal of Dubai for real estate investment. We have witnessed high levels of transactional activity recently in the prime marketplace, with the appeal of Palm Jumeirah as an example, still more popular than ever. In addition to the obvious advantages of its year-round sunshine and climate, our clients also welcome being in one of the safest cities in the world where families can relax and enjoy the benefits that come from living in Dubai.

© Opinion 2021

Any opinions expressed in this article are the author’s own

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