It’s getting harder to buy luxury homes in Dubai – and prices aren’t the issue

Dubai: Is it getting harder to buy luxury homes in Dubai? Yes, but it’s not because of sky-high costs or because there is even a remote possibility of fewer buyers. In fact, as the ongoing demand for high-end properties from high-net-worth individuals consistently keep outpacing the supply of such homes in the Emirate, luxury home listings have been dropping, cites a recent survey.

The number of homes available for sale in Dubai’s prime residential markets – Emirates Hills, Jumeirah Bay Island, Jumeirah Islands and The Palm Jumeirah – has fallen by 47 per cent over the last 12 months to 2,851 properties, according to the latest analysis from global property consultant, Knight Frank.

Faisal Durrani, Partner – Head of Research, MENA, explained: “The global super-rich remain fixated by Dubai, which is overwhelming the supply of luxury homes in the city. Indeed, the volume of demand for property in Emirates Hills, Jumeirah Bay Island, Jumeirah Islands and The Palm Jumeirah has resulted in a 47 per cent drop in the number of homes available for sale in these areas over the last 12-months.

“This builds on the findings from our 2024 Destination Dubai report which found that $4.4 billion of global private capital is actively targeting the emirate’s residential market this year – up 76 per cent on 2023. This clearly highlights that the international buyer appetite, particularly among the uber wealthy continues to strengthen and developers appear unable to keep pace with the demand.”

$10 million-plus home sales soar

At the very top of the market, Dubai has continued to cement its position as the deepest $10 million-plus home sales market, says Knight Frank. After registering a record 431 sales above $10 million during 2023 – 80 per cent higher than the next nearest contender: London – the emirate has seen a further 190 sales in this exclusive price bracket during H1.

Durrani continued: “What is extraordinary about the continued sales growth in Dubai’s $10 million homes market is that it is set against a protracted decline in the number of luxury homes on the market. In fact, the number of $10 million plus home listings fell by 65.5 per cent over the last 12-months to just 460 properties.

“This is a strong sign of the ‘buy-to-hold’ buyer profile that has taken root in the market, with anecdotal evidence continuing to suggest international HNWI are largely focussed on purchasing homes in the city for personal use, rather than to ‘flip’, which was a defining feature of the previous two market cycles.”

The total value of 10 million-plus homes sold during H1 totaled $3.2 billion and builds on the $7.7 billion figure recorded during 2023.

The Palm Jumeirah registered 21 deals worth over $ 10 million, totalling $365 million, and dominated the luxury homes market during Q2, accounting for 26 per cent of sales by total value. Emirates Hills (10 per cent) and District One (7.8 per cent) followed in second and third place, respectively.

The Palm Jumeirah (21) also led the pack in terms of the total number of luxury homes sold, followed by Dubai Islands (9) and Emirates Hills (8).

‘Robust’ demand for $25 million-plus homes

Will McKintosh, Regional Partner and Head of Residential, MENA, added: “Even further up the price spectrum, demand remains extremely robust, with the number of $25 million-plus home sales growing by 25 per cent in the last three months alone, taking the tally for the first half of 2024 to 21.

“What is remarkable about this figure is that the average number of $25 million plus home sales between averaged less than three a year, between 2015 and 2021”.