Dubai registered a record 219 ultra-prime, or $10 million plus, home sales in 2022, according to the latest analysis by global property consultant, Knight Frank.

Faisal Durrani, Partner – Head of Middle East Research, said: “The meteoric rise of Dubai’s multi-million-dollar homes market over the course of the last two years has been phenomenal. From just 11 ultra-prime sales in 2010, 2022 has registered 219 deals above the $10 million mark – more than the total recorded between 2010 and 2020.

“The performance at the top of the market clearly demonstrates the arrival of Dubai as a luxury hub to rival long established markets elsewhere, with no sign to suggest a slowdown in the seemingly relentless demand from global ultra-high-net-worth-individuals zeroing in on the emirate in search of second homes. Indeed, our 2023 Global Attitudes Survey shows that amongst the region’s wealthy, the UAE remains the second most likely target for a home purchase this year, behind the UK.”

Knight Frank’s research also reveals that the emirate’s prime markets, which include Emirates Hills, Jumeirah Bay Island and The Palm Jumeirah, have collectively registered price growth of 44% during 2022.

RECORDS TUMBLE

Durrani continued: “Dubai’s prime residential market has performed in line with our expectations and with average transacted prices standing at around AED3,250 per sq ft, or about $885 per sq ft, it remains one of the world’s most affordable luxury home markets, which is further boosting the city’s appeal amongst international buyers.

“The Palm Jumeirah remains the city’s star-performer, with villa prices increasing by 49.4% last year, underpinned by a shortage of new waterfront villa projects in completed communities and the desire by the international elite to secure stand-alone beach front homes. The exceptional demand for homes on Dubai’s iconic Palm Jumeirah is best reflected in the fact that villa prices have risen by 96% since the start of the pandemic, but remain at about AED 3,000 per square foot. Prices are however now 34% higher than their 2017 peak”.

Villas in Mohammed Bin Rashid City (21.6%), Dubai Hills Estate (20.2%) and District One (19.5%) were the other locations that experienced the strongest gains in 2022.

Apartments too in the most sought-after locations have seen significant price rises. Interestingly, Dubai Hills Estate (22.7%) leads the 2022 league table, closely followed by The Palm Jumeirah (19.7%) and Downtown Dubai (13.8%). Apartments in the latter two locations are now trading for approximately AED2,200 per sq ft, says Knight Frank.

A MATURING LUXURY MARKET

Andrew Cummings, Partner – Head of Prime Residential, added: Dubai’s luxury market has truly matured and is now driven by world-class quality developments alongside luxury houses. Over the last year we saw a number of new luxury developments being launched, many of which had very brisk sales. Six Senses Palm Jumeirah, Bulgari Lighthouse and two developments serviced by Dorchester Collection, Ava and Orla, to name just a few. All of these launches have sought to quench the demand and pricing has been attractive in comparison with ready property.

“We have also seen robust sales at newly handed over, or soon to handover projects like One Palm, Dorchester Residences and Atlantis the Royal. What distinguishes these properties is the incredible architecture, world class amenities and high-quality finishing that is new to Dubai”.

Equally, Knight Frank says, while the traditional prime areas have continued to experience robust trading, new communities too have seen a surge in luxury sales. Dubai Hills as an example has had 15 deals over $10 million in 2022, including a record sale at AED205 million. Equally, Tilal Al Ghaf, Majid Al Futtaim’s flagship residential development, sold out its AED45-million Crystal Lagoon front villas and recently made a splash with the signature sale of a Lanai Islands mansion for over AED90 million.

Cummings continued: “The buyer pool remains exceptionally diverse, with expat residents and international high-net-worth-individuals from Europe, India, Europe, Asia the UK and Eastern Europe still arriving in their droves and the vast majority are drawn by Dubai’s climate, safety, security, cosmopolitan lifestyle and incredibly forward-thinking leadership.”

MAINSTREAM MARKET

Away from the upper echelons of the market, price growth has been sustained in 2022, with average home prices in Dubai climbing by 9.5%, exceeding Knight Frank’s forecast of 7%. Despite the magnitude of increases, villa prices are still 4.8% below their 2014 peak, while apartments are around 22% cheaper, says Knight Frank.

Durrani concluded: “The ability of the mainstream market to sustain this trajectory of growth is very much hinged on how the global economic story plays out, coupled with domestic considerations around supply and interest rates, which for now appear to be low-medium level risks. Our view for 2023 remains unchanged, with the whole market likely to experience growth of 5-7%, while the prime market is likely to come in at double this level at about 13.5%.”