A surge in property investment from high-net-worth individuals (HNWIs) between 2012 to 2022 has placed Dubai’s real estate market on a trajectory to achieve about $82 billion (Dh300 billion) in sales this year, according to a new report. Dubai real estate agency Unique Properties cites that the emirate houses over 68,400 HNWIs – a 62 percent increase in the past decade.
It says Dubai has become a preferred destination for the world’s highly affluent to settle down in largely due to the UAE’s handling of the pandemic and the country’s convenient geographic location.
However, tax advantages and favourable policies, which global investors are becoming increasingly aware of, are also major contributing factors that have forecasted Dubai’s real estate market to witness 46 percent growth in 2023.
Overseas turmoil has seen an influx of Europeans migrate to the UAE and this trend is expected to continue while a predicted uptick in Chinese investors is also set to further drive growth in the luxury property segment of Dubai; the cosmopolitan city’s prime real estate market is on pace to see growth of nearly 14 percent throughout the year. Downtown Dubai, The Palm Jumeirah, and JBR are among the major districts spurring this growth.
Increased demand for luxurious residences in these areas is seeing the price of high-end homes in Dubai spike from 6 percent to 7.9 percent in 2023 to represent the highest value increase worldwide.
Despite this surge, transactions over $270,000 are being recorded every day, the report says. Arash Jalili, founder and CEO of Unique Properties, said: “Dubai’s real estate market has maintained its post-pandemic momentum, and this has unlocked the potential to shatter last year’s historic growth with HNWIs consistently relocating to the UAE.”
“Real estate has already surpassed $3.27 billion (Dh12 billion) since the beginning of the year and with total property transactions in April increasing by more than 16 percent when compared to the same period one year ago, the emirate remains on an upward trajectory.”
According to the most recent data, total property transactions in April stood at 7,615 and real estate prices increased by an annual average of 14.5 percent with the off-plan market spearheading this growth.
The Middle Eastern business hub racked up 219 sales of properties worth $10 million or more in 2022, according to property consultant Knight Frank LLP. By comparison, New York registered 244 deals worth $10 million or more, Los Angeles, 225 transactions and London, 223. Dubai was also the fifth most active city for sales worth $25 million and above with 26 transactions.
“Dubai has arrived,” said Faisal Durrani, head of Middle East research at Knight Frank, said at the time. “The growing concentration of wealth in the city has been catalyzed by the confluence of factors, ranging from the government’s decisive response to the pandemic, to the roll-out of a range of new residency visa options.”
Still, Dubai is one of the world’s most “affordable luxury home markets,” ranking 16th in Knight Frank’s 20 global prime residential markets. In today’s market, $1 million will secure 1,130 square feet (104.98 square meters) of residential space in prime districts such as the Palm Jumeirah, Emirates Hills, or Jumeirah Bay Island – four times more space than in New York, London, or Singapore.
“Dubai’s market still represents outstanding relative value,” said Andrew Cummings, Head of prime residential at Knight Frank. “It is this value that continues to drive UHNWI buyers into our market, most of whom are seeking a sun-sand-sea lifestyle that is now synonymous with Dubai. The city’s appeal stretches right across the world.”
