Prices of prime residential properties in Dubai rose by more than 16 per cent last year, the second-fastest pace globally, as demand continued to remain strong amid a broader economic recovery.
The values of homes that cost at least $10 million in the prime neighbourhoods of The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island experienced record growth last year, property consultancy Knight Frank said in a report on Wednesday.
Around the world, luxury residential property prices rose by an average of 3.1 per cent last year, with Manila topping the list of 100 markets tracked in Knight Frank’s Prime International Residential Index report.
Prices in the Philippine capital increased by 26 per cent while the Bahamas was in third place, with a 15 per cent increase in prices. The Algarve in Portugal and South Africa's Cape Town (both at 12.3 per cent) rounded off the top five.
“The total number of prime homes available for sale declined by 38.5 per cent in Dubai during 2023, echoing the 52 per cent decrease in sales inventory in Dubai’s Burj Khalifa over the same period,” said Faisal Durrani, partner and head of research for Mena region at Knight Frank.
“Owners are clearly deciding to hold on to their homes for longer, with inventory levels falling sharply, signalling the longer-term residency mindset now bedding in among the increasingly dominant buy-to-hold purchasers.”
This has helped to sustain price growth in the emirate’s prime market, he said.
Despite the record-breaking sales of luxury homes last year, Dubai is still ranked towards the bottom end of the most expensive prime markets globally, the report said.
With $1 million securing 979 square feet in any of the emirate’s three prime residential districts, the city was ranked 13th on the list of the world's top 15 prime residential markets.
In comparison, $1 million buys about 172 square feet of space in first-placed Monaco.
“Dubai remains one of the most affordable luxury markets in the world, which only adds to its appeal among the international elite who dominate the upper echelons of the market,” Mr Durrani said.
Knight Frank forecasts that prime residential values in Dubai will rise by 5 per cent this year, positioning the city as the third fastest-growing prime residential market globally, behind Auckland (10 per cent) and Mumbai (5.5 per cent).
Dubai's luxury home market hit record levels in 2023 as sales of $10 million-plus homes nearly doubled to $7.6 billion, performing better than London and New York, Knight Frank said last month.
While sales within the price bracket rose by 91 per cent last year, about a third (28 per cent) of the 431 transactions were completed in the final quarter.
-
The Palm Jumeirah saw the majority of deals in luxury and super luxury sales in Dubai in 2023. AFP -
At 450m, the Franck Muller Aeternitas tower will be one of the tallest in the city when complete in 2027. It will feature 649 one, two and three-bedroom apartments, plus duplexes, over 106 floors – all topped by a giant clock. Photo: London Gate -
Bayz 101 by Danube will have 1,346 apartments and is the developer's largest project to date in terms of both units and overall space. Photo: Danube Properties -
Sharjah property developer Arada has launched sales for its luxury project in Dubai, the Armani Beach Residences at Palm Jumeirah. Prices start at Dh21 million ($5.7m). Photo: Arada -
Designed by Japanese Pritzker-Prize-winning architect Tadao Ando, in collaboration with fashion icon Giorgio Armani, Armani Beach Residences features 53 two to five-bedroom residences, plus penthouses and two presidential suites. Photo: Arada -
One of the largest private penthouses in Dubai is on sale for Dh600 million. It comprises the three top-three levels and rooftop of Raffles The Palm Dubai Residences. Photo: Emerald Palace Group -
Dubai's AHS Properties has launched a $850 million project called Casa Canal, located at Dubai Water Canal. Photo: AHS Properties -
Casa Canal will have a mix of residences, including three-bedroom penthouses, four and five-bedroom villas and six-bedroom mansions. Units are priced between Dh22.5 million and Dh185 million and the project is set to be delivered in late 2025. Photo: AHS Properties -
Nakheel, the developer behind The Palm Jumeirah, launched the first waterfront villa project on the Palm Jebel Ali in 2023. Leslie Pableo / The National -
The launch of properties on four fronds of Palm Jebel Ali offer two types of homes – coral and beach villas, says Nakheel. Photo: Nakheel -
Dubai developer Sankari Properties is building a $1 billion ultra-luxury project in Marasi Business Bay. Units will start at $10 million. Photo: Sankari Properties -
Damac launched Cavalli Couture on Dubai Water Canal in 2022. The 14-storey building features 70 units, comprising three, four and five-bedroom duplex sky villas and duplex penthouses. Photo: Damac -
Jumeirah Bay Island is one of Dubai's prime residential neighbourhoods. Photo: Bulgari -
There were close to 50 sales of Jumeirah Bay Island properties in excess of $10 million in 2023. -
Also much sought-after is The Mansions, Lanai Islands, Tilal Al Ghaf, Dubai. Photo: Knight Frank -
A luxury villa in Dubai's Emirates Hills sold for Dh102.8 million in 2022. Photo: Phoenix Homes
Dubai's super-prime market – properties valued at more than $25 million – also surged last year, with 56 deals worth $2.3 billion – double the previous year's total.
The emirate, one of the main commercial, tourism and financial centres of the Middle East, has maintained its strong growth momentum since bouncing back from the coronavirus-induced slowdown.
Its economy expanded by an annual 3.3 per cent in the first nine months of last year, driven by growth in the tourism and transport sectors, government data showed last month.
Emirates NBD expects Dubai's gross domestic product to grow by 4 per cent this year, compared with a 3.3 per cent expansion in the UAE economy.
