Demand for homes in Dubai continues to remain strong, as evidenced by the volume and value of transactions recorded across the city during the second quarter, which were up by 46.5 per cent and 47.2 per cent, respectively on the same time last year.
Unsurprisingly, upward price pressure is persisting, with home values rising by 6 per cent between January and June this year, leaving them 20.7 per cent higher than last summer and 6.4 per cent above the last market peak in 2014.
While apartments have registered strong price rises of 20.3 per cent in the 12 months to the end of June, villas continue to be the star performer, with villa prices now 28 per cent higher than they were 10 years ago. Of course, this exceptional demand for villas has in large part been driven by domestic buyers looking for more space as the global race for space in the wake of the pandemic drives demand for ever larger homes to accommodate home offices and home gyms and multi-car garages.
In addition, and arguably an even stronger driver of villa prices across the city, particularly in Dubai’s prime neighbourhoods has been the unrelenting and insatiable demand from international ultra-high-net-worth individuals, who are non-resident in the UAE, who have been actively targeting the city’s most expensive homes.
In addition, and arguably an even stronger driver of villa prices across the city, particularly in Dubai’s prime neighbourhoods has been the unrelenting and insatiable demand from international ultra-high-net-worth individuals, who are non-resident in the UAE, who have been actively targeting the city’s most expensive homes.
These buyers have, for the most part, been seeking homes in the emirate for personal use – for use as a main residence, a holiday home, or even a second home. And it is the world’s super rich who are purchasing for personal reasons. Indeed, this was evidenced in our 2024 Destination Dubai report, which found that 43 per cent of global HNWI with wealth in excess of $15 million were keen on buying a home in the city this year for personal reasons.
Deepest luxury homes market
The depth of demand from the global elite has propelled Dubai’s luxury homes market, with prime residential values rising by 7 per cent in the 12 months to the end of June, building on the 44.4 per cent growth recorded during 2022 and the 16.3 per cent rise registered last year. Unsurprisingly, during the second quarter of 2024, Dubai retained its position as the top market globally for the number of home sales over $10 million, with New York (72) and Hong Kong (61) ranking in second and third place, respectively. In fact, even during the 12 months to the end of June 2024, Dubai registered 436 home sales, almost equalling the total combined number of luxury sales in New York (229) and London (214) over the same period.
Racing to satisfy demand
Developers are racing to satisfy the demand for $10 million plus homes as the rate at which ultra-luxury homes are selling continues to accelerate. In parallel, $10 million plus listings continue to decline, with a near 51 per cent fall during the first nine months of 2024, compared to the same period last year. Despite this, sales volumes in this exclusive segment retain their upward trajectory. This highlights the strength and persistence of demand for the city’s most expensive homes, which the ultra-rich continue to secure at record rates. Indeed, this is also reflected in the fact that the ratio of $10 million plus home sales to listings has climbed to 17.1 per cent this year, from 10.7 per cent during 2023. There has been a sharp fall in $10 million plus home listings, from 3,316 during the first and third quarters of 2023 to just 1,622 in 2024. This highlights the fast pace at which luxury units are being sold and not returning to the market, which Knight Frank believes reflects the buy-to-hold and buy-to-live mentality that is now prevalent in Dubai’s luxury homes market.
- The writer is Partner – Head of Research, MENA, Knight Frank Middle East
