In Dubai, sales of $10m plus homes make up 7% of overall property sales: Knight Frank
Even luxury apartments get into the act, with recent launch of 10,000 psf project on Palm
Dubai: The rich will have to shell out more on their next villa purchase in Dubai – average prices in key locations such as the Palm and Dubai Hills are up 14-18 per cent this year. And they could keep climbing.
Recent offplan launches in the super-luxury space too are pushing the price envelope – at the latest Palm Flower project, the apartments are priced in the Dh10,000 a square foot range, according to Knight Frank. There project, which has famed Foster + Partners as architect, will have only one apartment to each floor, and the top of the range will be priced at Dh200 million.
“$10 million plus home sales now account for 7 per cent for all transactions in the city by value compared to a long-term average of just 2 per cent,” said Faisal Durrani, Partner – Head of Middle East Research at the consultancy Knight Frank. “The buoyancy in market sentiment has rippled outward from the emirate and caught the attention of a new flavour of buyer - non-resident, ultra-high net worth individuals, who for the first time are flocking to the city to secure our most expensive property.”
No waiting around
The most expensive areas in the city are having the “sharpest turnaround in values”, with apartments in locations such as the Palm Jumeirah (up 14 per cent) and Downtown Dubai (at 8 per cent) outperforming apartments (down 3.1 per cent) in general, since the start of the pandemic.
“Buyer habits have evolved over the course of the last 18 months (since the pandemic breakout),” added Durrani. In comparison, in the 18 months after 2009’s Global Financial Crisis, property values in Dubai were down by nearly 32 per cent.
The new wave of buyers - from locations such as Monaco, Switzerland and China - are “driving an even sharper rebound at the top of the market”. More modestly priced properties continue to be under price pressure. (Overall residential values overall are still 29 per cent below the 2014 peak.)
Third cycle
Dubai property had its busiest overall September on record, with total home sales crossing Dh12.2 billion - and double the previous September record of Dh6.1 billion. "While values are still creeping up, anecdotal evidence points to an emerging delta between seller and buyer expectations, [which is] a classic sign of a rising market that may soon stall," said Durrani. "Total transaction volumes in October declined to Dh11.2 billion, still marking the busiest ever October for the market, but a decline on the previous month, nonetheless."