Dubai: Global millionaires to spend over Dh9 billion in property market in 2023

Global millionaires, are poised to spend $2.5 billion (Dh9.17 billion) in Dubai’s growing real estate market this year.

According to global property consultancy Knight Frank’s inaugural Destination Dubai survey report, 22 per cent of respondents are prepared to commit $5-10 million, while eight per cent are ready to spend over $80 million, with Downtown and Palm Jumeirah emerging as top favourites for millionaires.

For millionaires from the UK, European and North America, Palm Jumeirah and Emirates Hills emerge as preferred locations for residential purchases. For East Asian investors, Downtown is a definite favourite followed by Business Bay.

“Dubai has reached a tipping point and instead of jostling for recognition, the city is going toe to toe with the world’s long-established hubs as a magnet for the world’s wealthy. Outstanding transport infrastructure, unrivalled global connectivity and exceptionally forward-thinking leadership has catapulted Dubai’s reputation and status globally, as evidenced by the unrelenting demand from international high net worth individuals to own second homes here, or indeed relocate to the emirate,” said Faisal Durrani, partner and head of Middle East Research at Knight Frank.

The survey covered 183 millionaires globally, each with a networth of over $3 million, excluding their main home, or primary residence. Together, they own 851 homes around the world and have a combined networth of $ 3.2 billion.

Demand for Dubai’s prime and ultra-luxury properties has grown exponentially in the past couple of years, with thousands of millionaires flocking to the emirate and buying properties to live here.

The emirate has, of late, seen record-breaking sales of luxury properties. In February, a nine-bedroom apartment has been sold for a whopping Dh410 million ($112 million) at Bvlgari Light House, Jumeirah Bay Island, becoming the most expensive apartment to be sold ever in the emirate.

On Tuesday, the most expensive penthouse was sold in Palm Jumeirah for Dh220 million. The penthouse sold was on the topmost floor of AVA at Palm Jumeirah, Dorchester Collection, spanning a built-up area of 33,406 sq ft.

88 homes sold for Dh6 billion in Q1

Last year, $3.8 billion was spent on homes priced at over $10 million in the emirate.

Dubai emerged as the world’s fourth-most active market for luxury home sales in 2022, behind New York, Los Angeles, and London. The city recorded 88 home sales of over $10 million in the first quarter, cumulatively exceeding Dh6 billion. High demand from local and international ultra high-networth individuals (UHNWIs) led to a 16 per cent increase in average transaction prices for these luxury homes. Prominent neighbourhoods like Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island continue to lead the charge.

In Q1, according to Knight Frank, average prices for homes above $10 million reached Dh7,235 per square foot, a 16 per cent surge from 2022’s Dh6,250 per square foot, led by Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island with prices averaging Dh8,800 per square foot during January-March period.

“The constantly changing landscape of Dubai’s real estate indicates that we are starting to see new submarkets emerge, coupled with the huge demand for luxury homes means that we will be adding new markets to our prime index. Tilal Al Ghaf is a neighbourhood that has quickly joined Dubai’s growing list of ultra-luxe areas. Three homes sold for over Dh90 million last year, and seven villas transacted for over $10 million in Q1 of this year,” said Andrew Cummings, partner and head of Prime Residential at Knight Frank.