Over the first three months, cash-ready purchasers from the UAE and outside purchased slightly over 30 $10 million properties in Dubai, setting the stage for another record year for ‘super-prime’ residential sales in the city. There were 93 of these $10 million and over sales in 2021. (including quite a few in the Dh100 million range).
“The 2021 tally of $10 million homes was more than the combined tally Dubai saw from 2015-20,” said Faisal Durrani, Head of Middle East Research at Knight Frank, the UK consultancy. “Going by the year-to-date, 2022 sales of these super-prime homes will be equal or close to the 2021 number. What that means is there is no let-up in demand for luxury homes in Dubai from the global ultra-rich.
“If anything, the numbers in the year-to-date suggest an out-performance – even though 2021 had set a very high bar.”
It definitely appears so, with a property on the Palm selling for Dh280 million – the most expensive home sale to date – and a Dh180 million penthouse attracting a lot of interest in recent weeks.
Villas close in on 2014 prices
Prices for villas in Dubai increased by 20.2 percent in March 2022. Property prices have risen by 58.9% (excluding plot sales) in just three locations: the Palm, Emirates Hills, and Jumeira Bay, with average transactions showing buyers spending Dh2,700 per square foot.
“The way villa values are moving in Dubai, they are just around 12.9 percent away from reaching their all-time high set in 2014,” said Durrani. “Even then, we find that prime Dubai property is still a fraction of what it costs in London or elsewhere. The same is true for beachfront properties. That’s what’s attracting the ultra-high net worth individuals to shop for homes in Dubai.”
According to Knight Frank research, $1 million will get you 1,300 square feet in a premium property in Dubai. When compared to London market rates, the buyer will be able to move into a 330 square foot property.
Dubai’s development mantra has changed from ‘build and they will come to ‘build, and they will come and stay’. That’s been driving up demand for super-prime homes in recent months
– Faisal Durrani of Knight Frank
Q2-22 will be decisive
The belief at the start of the year was that the Dubai property market would be unable to sustain 2021 demand or price rises at the upper end of the market. According to the evidence so far, this has not been the situation on the ground. There have been some subtle modifications, but nothing major.
“The Palm continues to see some exceptional record sales; however, these have predominantly been custom-built villas, with traditional Nakheel-built villas now reaching a level where buyers are starting to hold back,” said Andrew Cummings, Partner – Head of Prime Residential, Knight Frank. “Likewise, Jumeira Bay has seen a slowdown in land sales with prices for plots now exceeding Dh100 million.”
As a result, the demand for luxury residences in Dubai will be determined by the second quarter demand and sales. A continuation of the first three months’ performance will prove that the momentum is well and fully on. The fact that more European purchasers are becoming active suggests that this could be the case.
Because as Durrani says, “Super-prime in Dubai is still four or five times less expensive than in the major global cities.” That, for the world’s wealthy, is one valid reason to head for Dubai – and get home.