Dubai’s luxury real estate is being absorbed by the ultra-wealthy as they hunt for better offers.
Discover how the emirate remains affordable compared to other major cities despite rising prices. Explore our research findings today.
Based on a recent survey, Dubai registered 948 transactions in the luxury property market during the first five months of 2024, with each sale priced at Dh15 million ($4 million) or more.
According to a research by the real estate firm Betterhomes, these high-value deals were concentrated in strategic locations including Palm Jumeirah, Mohammed bin Rashid City, Dubai Water Canal, Tilal Al Ghaf, and Dubai Hills Estate.
These areas not only saw the greatest number of sales of luxury real estate during this time, but they also made a substantial contribution to the total dollar amount of transactions made.
The highest-priced primary house sale in the emirate this year was a Dh165.6 million deal at the Ritz Carlton Residences by MAG in Dubai Healthcare City, according to Betterhomes.
According to the data, a Dh140 million deal in Jumeirah Bay’s Bulgari Lighthouse by Meraas and a Dh140.5 million deal in the Dubai Water Canal’s Fendi Casa Canal by AHS Properties.
According to Louis Harding, managing director of Betterhomes, a truly independent luxury real estate market is a relatively recent phenomena in Dubai and only really started to gather substantial momentum post-Covid, partly because of the government’s proactive response to the pandemic.
Because of the city’s appeal as a place to live and work, its stable and consistent governance during a period of historically high global elections, the relative scarcity of luxury real estate, the availability of several long-term residency programs, and—perhaps most importantly—Dubai’s relative affordability when compared to other major cities—I anticipate moderate house price inflation to persist despite the city’s continued population growth and consequent demand.
The property market is being supported by the UAE’s economy’s overall expansion as a result of its diversification efforts.
Sales of residences priced at $10 million or more more than doubled to $7.6 billion last year, setting a record for Dubai’s luxury prime market and surpassing both London and New York, according to a survey conducted by Knight Frank earlier this year.
Properties in Dubai worth more than $10 million also saw price increases last year at one of the fastest rates in the world, climbing by 26%, according to Knight Frank. This was due to the continued demand from overseas for upmarket residences in the emirate.
The rise in wealth creation globally has had a significant impact on Dubai’s real estate market. According to Betterhomes, wealthy individuals seeking to diversify and safeguard their investments in the face of geopolitical volatility are increasingly drawn to Dubai.
Substantial tax and legislative changes, and a shortage of supply driving up prices have made wealthy people look to Dubai as their new home.
Compared to these other cities, the city gives more value for the money, offering a higher level of luxury for the same investment.
London had the highest average price per square foot of real estate at $824, followed by New York at $808, Singapore at $765, Los Angeles at $663, Toronto at $659, and Dubai at $352 in the first quarter of 2024.
Despite the fact that immigration has caused these cities to expand over time, there are significant challenges that prevent them from providing good value in the real estate market, according to the research.
A major problem is the severe lack of available housing to meet the increasing demand. It went on to say that because of this scarcity, prices are rising and it is harder for purchasers to discover homes that are a good investment.
Dubai, on the other hand, is aggressively tackling the issue of supply by increasing the total number of upscale residences it has available. According to the corporation, over 50 opulent projects are presently being built, with prices for each unit starting at Dh15 million or more.
According to the research, from January to May, there was a notable surge in luxury rental transactions in Dubai, with 270 contracts signed for apartments that commanded annual rates of Dh1 million or higher.
This upscale market was dominated by Palm Jumeirah, MBR City, and Dubai Hills.
According to the Betterhomes survey, the rise in travelers and transit users has also raised demand for short-term rental houses, particularly opulent vacation homes.
To take advantage of this rising demand, a lot of landlords are now thinking about converting their homes, especially those with larger layouts and seaside sites, it continued.
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