The HNWI surge is expected to propel Dubai’s ultra-luxury real estate to new heights

Riding the wave of a property boom that resulted from an extraordinary spike in inflows of capital during the first quarter, it is anticipated that by 2025, high-net-worth individuals will account for 24.6% more of Dubai’s real estate, “propelling the ultra-luxury segment to unprecedented heights.”

In the first quarter, the residential real estate market in Dubai jumped to $110 billion, driven by a 55% increase in investment inflows, with 42% of the new investors coming from overseas markets, according to Springfield Properties’ Quarter 1, 2024 Market Insights Report. Springfield Properties is a prominent real estate brokerage in Dubai.

“Building upon the record-breaking achievements of 2023, Dubai’s residential market continued its upward trajectory in Q1 2024, with an impressive 37,134 transactions totaling $109.8 billion. The upward trend is expected to escalate following the move to waive the Dh1 million minimum down payment requirement for golden visa eligibility through real estate investment,” the report said.

“The first quarter of 2024 witnessed a significant milestone in Dubai’s real estate landscape, marked by a notable surge in sales. This surge reflects the robust investor confidence and market liquidity vital for sustaining growth and competitiveness,” said Farooq Syed, CEO of Springfield Properties. “Our report highlights a growing demand for off-plan properties, signaling a strategic shift in investment preferences and highlighting the sector’s potential for capital appreciation and yield generation,” he added.

“During this quarter, the balance between off-plan and secondary market sales underscores a mature and diverse real estate landscape. This equilibrium reflects investor confidence and market stability, showcasing the resilience of the property sector,” the report said.

“Dubai’s strategic focus on regulatory frameworks and ongoing infrastructure improvements have substantially bolstered the city’s appeal. When combined with our market insights, these elements reaffirm Dubai’s position as a prime destination for investors in search of enduring value and growth opportunities,” said Sayed.

Another trend is that the rate of capital growth in the apartment market is gradually getting closer to that of the villa market, per a different survey carried out by ValuStrat.

According to a report on Dubai residential capital values released by an international consulting firm, the ValuStrat Price Index (VPI) increased by 24.7 percent annually and 2.1 percent monthly in March to 167.5 points. As compared to the January 2021 baseline of 100 points, villas scored 211 points and apartments scored 139.2 points.

Month-over-month, apartment prices increased by 1.9%, recording a record annual growth of 20.1%. In contrast, capital gains on villas were 2.4% from February of last year and 29.6% from the prior year.

With a 32.6 percent increase in apartment capital over the previous year, Discovery Gardens demonstrated the highest growth. Next in order of importance were Town Square (24.5%), The Views (24.8%), Palm Jumeirah (29%), and The Greens (29.8%).

The apartments in Palm Jumeirah have experienced the highest rate of growth, with an increase of 83.6 percent, compared to The Greens (55.2 percent) and Jumeirah Beach Residence (52.2 percent), with a VPI base price of 100 in January 2021.

Villas in popular communities like Palm Jumeirah and Jumeirah Islands are growing at a rapid pace; they are both up 37.7% from the previous year. The next three places were Arabian Ranches (29.2%), Mudon (30.2%), and Dubai Hills Estate (34.8%).

Following Palm Jumeirah (125.7%), the Jumeirah Islands (143.5%) had the highest rate of villa growth since January 2021.

Fifteen ready properties valued at more than Dh30 million were sold. These villas are located on Jumeirah Bay Island, Palm Jumeirah, Emirates Hills, Jumeirah Golf Estates, and Dubai Hills Estate.

Every month, off-plan Oqood (contract) registrations grew by 18.2%, representing a 14% annual increase. In March 2024, Emaar accounted for the largest percentage of Oqood transactions at 14.9%. It was followed by Sobha (5.6%), Azizi (6%), and Damac (10.9%), which topped the developer sales charts overall.

Projects in Jumeirah Village Circle (10.9%), Zabeel First (6%), Meydan One (5.7%), and Business Bay (5.6%) were among the top off-plan locations that were transacted. In terms of ready-to-move-in sales, Jumeirah Village Circle topped the list with 9.3%, followed by Business Bay (7.4%), Dubai Marina (6%), and Downtown Dubai (5.3%).