According to the most recent analysis conducted by global property consultant Knight Frank, Dubai saw 88 home sales of over $10 million which totalled Dh6 billion during the first quarter.
The analysis by Knight Frank also reveals that the city’s premier residential neighbourhoods, including Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, continue to dominate luxury home sales, with first-quarter average transacted prices for US10 million homes in these coveted areas reaching Dh8,800 per square foot. But, other areas of the city are quickly gaining prime status as well.
Faisal Durrani, Partner – Head of Middle East Research said: “The $10 million plus homes market in Dubai continues to strengthen, with 88 sales being registered in Q1 alone. 2022 saw Dubai record 219 deals above this price point, positioning the city as the fourth busiest luxury homes market in the world. 2023 is shaping up to be another record year for this segment of the market.
“The depth of demand for homes at this price point from local and international UHNWI [ultra high net worth individuals] is helping to drive up prices in this exclusive segment of the market. Indeed, Q1 has seen average transacted prices for $10 million plus homes reach Dh7,235 per square foot, which represents a 16 per cent increase on 2022’s Dh6,250 per square foot.”
While the Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills, three of Dubai’s prime neighbourhoods, accounted for 64% of $10 million in home sales during the first quarter, other areas are also gaining prominence and are likely to be classified as “prime” if they continue to firmly establish themselves as upscale neighbourhoods, the Knight Frank study reveals. One such place is the Al Wasl-Dubai Canal corridor, where branded residential sales have helped it become a hotspot for UHNWI who are interested in purchasing the priciest properties in the emirate’s most coveted neighbourhoods.
Andrew Cummings, Partner – Head of Prime Residential Sales, added: “Tilal Al Ghaf is the other location that has quickly joined the growing list of ultra-lux neighbourhoods in Dubai. Last year, three homes here sold for over Dh90 million and during Q1, seven villas transacted for over $ 10 million, strongly suggesting that Tilal Al Ghaf will soon meet our definition for a prime neighbourhood.
“While the bulk of international UHNWI looking at Dubai are drawn to acquiring second homes on the coast, Tilal Al Ghaf has set a new benchmark for luxury living as an inland community that delivers on quality and amenities. The shortage of completed waterfront communities and the lack of developments sites that can be easily activated suggests that such inland communities will continue to grow in prominence.”
Dubai’s premium residential market had price increases of 44% in 2022, making it the fastest-growing luxury market in the world. According to Knight Frank, Dubai will have the fastest-growing residential market for the second year in a row as prime residential prices are expected to increase by 13.5%.
The city is the 16th most “affordable luxury” market in the world, with $1 million buying 1,130 square feet in any of Dubai’s three upscale neighbourhoods. This effectively means that compared to cities like London, New York, or Singapore, $1 million can purchase three times as much luxury residential real estate.
“With a shortage of prime developments under construction and no slowdown in the relentless UHNWI demand for luxury second homes in Dubai, the upward trajectory for prime prices is likely to be sustained,” Durrani said.