Dubai’s Luxury Property Market Is One Of The Most Active In The World: B Knight Frank Report
The Middle East’s business and tourism hub, Dubai, sold 219 properties worth more than $10 million last year, according to research by the international real estate consultant Knight Frank. The overall value of the deals was $3.8 billion.
According to the research, Dubai comes in fourth place for the number of prime properties sold for more than $10 million, after New York (244 sales), Los Angeles (225 sales), and London (223 sales).
The report also indicates that when it comes to sales of homes costing more than $25 million, Dubai is the seventh most active city. High-net-worth individuals are willing to invest in the most pricey residences accessible, indicating that there is a developing market for ultra-luxury properties in the city.
In 2022, luxury residences worth $3.8 billion will be sold in Dubai
This analysis reveals that, after a difficult downturn in recent years, the real estate market in Dubai is on the road to recovery. High-end residences appear to be in high demand, likely as a result of the city’s standing as the Middle East’s business and tourism powerhouse as well as its reputation for extravagance and luxury.
Dubai has emerged as one of the most sought-after destinations for luxury housing, along with well-established hub cities, according to Faisal Durrani, Partner and Head of Middle East Research at Knight Frank.
The city’s increasing wealth concentration can be ascribed to a number of things, including the government’s quick response to the pandemic and the introduction of additional permanent visa possibilities.
Furthermore, Durrani pointed out that there is still a severe shortage of luxury homes in Dubai. In the city’s most desirable areas, only eight new villas are anticipated to be built by 2025, he pointed out.
Because there aren’t many new luxury homes being built in Dubai’s most desirable neighborhoods, demand for and prices for already-built luxury homes are anticipated to increase.
Mr. Durrani believes that Dubai is comparably more affordable than other major cities, which increases the allure of having a residence there among the world’s wealthy.
He said that in Dubai’s upscale neighborhoods, $1 million can purchase about 1,130 square feet of space, which is almost five times more than what the same amount can get in Hong Kong and three times more than in London or Singapore.
This makes Dubai’s luxury property market attractive to investors who are looking to purchase larger living spaces at relatively lower prices.
The recent expansion of Dubai’s real estate market is attributable to the country’s economy’s recovery from the coronavirus outbreak. The city’s economy has been strongly supported by the rise in oil prices, and this has positively influenced the real estate industry.
To encourage more foreign investment into the country, the government has also implemented a number of regulations, including modifications to visa requirements.
The government of Dubai has been actively changing its policies in an effort to draw in foreign investment.
Offering long-term residency visas to foreign investors is one of these improvements, which has aided in boosting investor confidence in the country. the government has implemented measures to increase transparency and improve the overall business environment, making it more attractive for investors.
The Dubai Statistical Centre reports that in the first nine months of 2022, the emirate’s economy expanded by 4.6% YoY, with wholesale and retail trade accounting for 24.1% of the GDP (GDP). According to a forecast by Emirates NBD, Dubai’s GDP will increase by 5% overall in 2022 and by 3.5% in 2023.
Dubai’s real estate industry enjoyed a great year in 2022 as well. According to the CBRE Home Market Snapshot report, the market saw 90,881 sales, which was a record high and surpassed the previous high of 81,182 transactions set in 2009.
Andrew Cummings, Partner and Head of Prime Residential at Knight Frank, predicts that Dubai’s premium residential market will increase at the greatest rate among other worldwide markets this year, 13.5%. Due to this development rate and the city’s generally affordable home prices, investing in Dubai’s luxury real estate market may be very profitable.
According to Andrew Cummings, Dubai’s luxury home market is appealing to ultra-high-net-worth people (UHNWIs) worldwide because of its accessibility and sun-sand-sea lifestyle. Chinese investors have also returned following the pandemic, in addition to regular purchasing nations like the UK, India, and Europe.
After the epidemic, many companies opened offices in Dubai, which attracted clients from new markets. This return to normalcy has also lured businesses to Dubai.
The UK, the UAE, and the US were the top three residential investment destinations listed by survey participants in Knight Frank’s yearly Attitudes Survey for 2023. Furthermore, 37% of Middle Eastern UHNWIs saw an increase in wealth of above 10% in 2022.
After a difficult period of stagnation in recent years, this analysis generally shows that Dubai’s real estate market is on the road to recovery. The city’s status as a commercial and tourism hub of the Middle East, along with its reputation for luxury and extravagance, appears to be driving demand for high-end properties.
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