Dubai's luxury residential market is projected to record the highest growth rate for any prime market globally, at 13.5 per cent in 2023, driven by a demand-supply imbalance and positive economic growth.
“Prime values are being fuelled by Dubai’s safe-haven status, an exceptionally diverse range of international ultra-high-net-worth people in search of luxury second homes, combined of course with the government’s … response to the pandemic, which has spurred business confidence,” Knight Frank said in a report on Monday.
Adding to the city’s appeal is its relative “affordability”, with prime homes selling for around $800 per square foot, “making Dubai one of the most ‘affordable’ luxury residential markets in the world,” it said.
A limited supply of new property is also expected to support the growth of the luxury property market in the emirate.
Dubai’s luxury home sales hit Dh6 billion ($1.63 billion) in the first quarter of 2023, with wealthy buyers snapping up 88 units valued at more than $10 million as prime property sales continued to pick up amid a wider economic recovery.
The emirate’s prime residential markets of Palm Jumeirah, Emirates Hills and Jumeirah Bay Island accounted for 64 per cent of luxury home sales during the three-month period, with average transaction prices in these locations reaching Dh8,800 per square foot, Knight Frank said in a report earlier in April.
Dubai has been ranked as the world’s fourth-most active market in the luxury residential segment as sales of prime properties continue to rise, the company said in March.
“The sustained strong demand for luxury homes from the international elite has significantly contributed to the 44 per cent increase in average villa prices across Dubai since January 2020,” said Andrew Cummings, partner and head of prime residential at Knight Frank.
“This level of growth has allowed villa prices to reach the last market peak in 2014, demonstrating Dubai's emergence as a leading global luxury hub.”
Last month, a 24,500-square-foot sand plot in Jumeirah Bay sold for Dh125 million, making it the most expensive land plot sold in the UAE.
The transaction surpassed the previous record of Dh91 million.
A luxury mansion at Lanai Islands in the Tilal Al Ghaf project was sold for Dh200 million amid higher demand for prime property in Dubai.
Meanwhile, Dubai residential prices jumped 13 per cent annually in the first quarter of 2023, driven by strong demand for ready homes in the luxury segment, according to the latest report.
On a quarterly basis, prices rose 5.6 per cent, marking the ninth consecutive quarter of growth, it said.
Villa prices surged 15 per cent annually to reach Dh1,450 per square foot, while apartment prices rose 12 per cent to Dh1,230 per square foot. On a quarterly basis, villa and apartment prices increased 5.1 per cent and 5.7 per cent, respectively.
Dubai Hills Estate recorded a 26 per cent increase in apartment prices in the last 12 months, making it one of the strongest gainers in the city.
The Palm Jumeirah has been the city's best-performing villa market, with prices rising by 14 per cent on a quarterly basis in the three-month period and 53 per cent over the last 12 months, Knight Frank said.
First Person
Richard Flanagan
Chatto & Windus
Scorecard:
England 458 & 119/1 (51.0 ov)
South Africa 361
England lead by 216 runs with 9 wickets remaining
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T
Price, base: Dh840,000; Dh120,000
Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo
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Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm
Fuel economy, combined: 9.9L / 100km; 11.6L / 100km
The specs
Engine: 3.8-litre twin-turbo flat-six
Power: 650hp at 6,750rpm
Torque: 800Nm from 2,500-4,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 11.12L/100km
Price: From Dh796,600
On sale: now
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