Dubai: Cash-ready buyers from within the UAE and overseas bought just over 30 $10 million homes in Dubai over the first three months – that should set up another record year for ‘super-prime’ residential sales for the local property market. In 2021, there were 93 of these $10 million and over sales (including quite a few in the Dh100 million range).
“The 2021 tally of $10 million homes was more than the combined tally Dubai saw from 2015-20,” said Faisal Durrani, Head of Middle East Research at Knight Frank, the UK consultancy. “Going by the year-to-date, 2022 sales of these super-prime homes will be equal or close to the 2021 number. What that means is there is no let-up in the demand for luxury homes in Dubai from the global ultra-rich.
“If anything, the numbers in the year-to-date suggest an out-performance – even though 2021 had set a very high bar.”
It certainly seems so, with recent weeks seeing a villa on the Palm sold for Dh280 million - the costliest home sale to date - and a Dh180 million penthouse getting quite a few interested parties.
Villas close in on 2014 prices
Villas in Dubai have seen prices gain 20.2 per cent in the 12 months up to end March 2022. If one looks at just three locations – the Palm, Emirates Hills and Jumeira Bay – property prices are up a staggering 58.9 per cent (excluding plot sales), with average transactions showing buyers spending Dh2,700 a square foot.
“The way villa values are moving in Dubai, they are just around 12.9 per cent away from reaching their all-time high set in 2014,” said Durrani. “Even then, we find that prime Dubai property is still a fraction of what it costs in London or elsewhere. The same is true for beachfront properties. That’s what’s attracting the ultra-high networth individuals to shop for homes in Dubai.”
Based on Knight Frank data, a $1 million spent on a luxury home in Dubai will fetch 1,300 square feet. Contrast that with the going rates in London, and the buyer will be able to move into a 330 square feet unit.
Dubai's development mantra has changed from 'build and they will come' to 'build, and they will come and stay'. That's been driving up demand for super-prime homes in recent months
Q2-22 will be decisive
At the start of the year, the belief was that it would be next to impossible for the Dubai property market to sustain the 2021 demand or price gains at the top end of the market. The evidence to date suggests that’s not been the case on the ground. Sure, there have been some changes, but nothing too overt.
“The Palm continues to see some exceptional record sales; however, these have predominantly been custom-built villas, with traditional Nakheel-built villas now reaching a level where buyers are starting to hold back,” said Andrew Cummings, Partner – Head of Prime Residential, Knight Frank. “Likewise, Jumeira Bay has seen a slowdown in land sales with prices for plots now exceeding Dh100 million.”
This is why the second quarter demand-and-sales will be decisive for luxury homes demand in Dubai. A continuation of what happened in the first three months’ showing will confirm that the momentum is well and truly on. More European buyers getting active does suggest this could well be the reality.
Because as Durrani says, “Super-prime in Dubai is still four or five times less expensive than in the major global cities.” That, for the world’s wealthy is one valid reason to head for Dubai – and get a home.