In terms of luxury real estate, Dubai is catching up to New York and Los Angeles.
After New York, Los Angeles, and London, Dubai has the busiest luxury real estate market in the world as a result of the flood of wealthy investors seeking refuge from global geopolitical and economic unrest.
According to property consultancy Knight Frank, 219 properties worth $10 million or more were sold in the Middle Eastern economic hub last year. Comparatively, London recorded 223 transactions, Los Angeles 225, and New York 244 agreements totaling $10 million or more. With 26 deals, Dubai was the seventh most active city for sales of $25 million or more.
“Dubai has arrived,” said Faisal Durrani, head of Middle East research at Knight Frank. “The growing concentration of wealth in the city has been catalyzed by the confluence of factors, ranging from the government’s decisive response to the pandemic to the roll-out of a range of new residency visa options.”
Due to the government’s response to the pandemic and its liberal visa restrictions, demand for real estate in Dubai is surging. An infusion of wealthy investors is helping the emirate’s luxury real estate market, which includes beachfront homes on the city’s artificial palm-shaped islands.
Hedge fund traders
The city is also becoming a popular choice for hedge fund traders, who are enticed by its tax-free status, simplicity of conducting business, and attraction as a center for international travel. According to Knight Frank, little over one-third of Middle Eastern people with the ultra-high net worth will see an increase in wealth of more than 10% in 2022.
Even yet, Dubai is among the “cheap” luxury house markets in the world, coming in at number 16 among Knight Frank’s top 20 global prime residential markets. In today’s market, $1 million will buy 1,130 square feet (104.98 square meters) of residential space, four times as much room as in New York, London, or Singapore, in prestigious neighborhoods like the Palm Jumeirah, Emirates Hills, or Jumeirah Bay Island.
And there are no signs that the boom will slow down. According to the consultant, the price of Dubai’s most opulent residences is anticipated to rise the highest globally this year, by roughly 13.5% after rising by 44% last year.
“Dubai’s market still represents outstanding relative value,” said Andrew Cummings, head of prime residential at Knight Frank. “It is this value that continues to drive UHNWI buyers into our market, most of whom are seeking a sun-sand-sea lifestyle that is now synonymous with Dubai. The city’s appeal stretches right across the world.”
Cash purchasers are becoming more common in Dubai. According to Durrani, in 2022, nearly 80% of Dubai’s property transactions by value were made in cash, up from 50% in 2007 and 40% in 2021.
Russians made up the majority of foreign buyers of Dubai real estate in 2017, according to Dubai-based brokerage Betterhomes in January.