This report is part of PERSPECTIVES, a comprehensive look into the world of prime residential real estate. Access the full report here to discover the latest trends and dynamics shaping the market.
Dubai’s ultra-luxurious properties continue to dazzle buyers from around the world. What does US $16 million buy in the largest city in the United Arab Emirates? A contemporary villa in the posh Palm Jumeirah neighborhood comes with ocean views, a large private pool and plenty of space for four or five friends to spend the night.
The custom interior with marble floors and soaring ceilings sits on a “frond” of the palm tree-shaped development on one of the world’s largest artificial islands. It’s the over-the-top luxury buyers here have come to expect.
“Dubai has attracted an impressive number of millionaires and billionaires, possibly more than any other place globally,” says Abdullah Alajaji, CEO and founder of Dubai-based Driven Properties. “As a result, this has reshaped the standards of luxury living. It’s not just about extravagant amenities or spacious areas; it’s about creating an unmatched lifestyle that goes beyond the ordinary.”
Park Lamar, for example, is a destination micro-community under development in the Canal District. When completed, it will be convenient to the beach, downtown and Dubai’s airport.
Park Lamar is poised to redefine luxury, mirroring the sophisticated preferences and upscale living of both international and domestic buyers. “It is the perfect example of how the product looks if it’s designed for a modern affluent buyer,” Alajaji says.
Modernist Villa, The World Islands (Sweden). Presented by Driven Properties
In 2023, the ultra-wealthy continued to snap up multimillion-dollar properties in Dubai. Overall, high-end residential neighborhoods such as Palm Jumeirah, Emirates Hills and Jumeirah Bay Island accounted for 64% of US $10-million-plus home sales in the first quarter of 2023, according to a media report.
The number of Dubai properties sold in the $20-million-plus range increased by 28% last year compared with 2022. “The luxury market has surpassed all others,” Alajaji says, “showcasing the enduring strength initially observed in 2021.”
Indeed, Dubai has been on an epic upward trajectory for the last three years. In 2021, real estate transactions totaled AED 300 billion, or US $87 billion, the highest sales value in Dubai’s real estate history. The growth spurt represented a 66% jump in the number of sales.
Although post-Covid sales slowed in other luxury locations, Dubai’s market remained strong in 2022 and 2023 despite global events that have made foreign investment unpredictable, Alajaji says.
Apartments and townhouses with brand names such as Four Seasons, Bulgari and Cavalli have been popular with buyers since 2021, Bloomberg reports. It calls Dubai the “world capital of so-called branded residences.”
Buyers mostly are residents of the Commonwealth of Independent States, a group of nations led by Russia and Belarus, Alajaji says. There is also a stream of buyers from Western Europe, particularly Germany, France and the United Kingdom.
At the end of 2023, he says there was “a significant uptick in interest coming from Southeast Asia, including China and Japan.”
Bulgari Lighthouse Residence, Jumeirah Bay Island. Presented by Driven Properties
With the strong market comes demand for high-end homes, which has started to outpace what’s available. “This scarcity has … intensified competition among buyers,” he says.
The priciest home sale in Dubai in 2023 was a five-bedroom penthouse in the yet-to-be-built Como Residences on Palm Jumeirah. The custom property, set to be completed in 2027, sold for AED 500 million, or US $136 million. Driven Properties had several transactions that sold for AED 100 million-plus, or US $27-million plus in 2023.
What’s coming in 2024?
“Growing demand in the mid to high-end range,” is a key trend, Alijaji says. The Knight Frank Wealth Report 2024 predicts a projected prime price growth of 5% for Dubai in 2024.
“We’re seeing a noticeable increase in the number of ultra-high-net-worth individuals, and it’s changing how things work in the real estate world,” Alijaji says. “It’s important to recognize that this surge could pose challenges, potentially making it difficult for some people to afford properties in the market.”
The Knight Frank report sees Dubai’s luxury market holding up. “After its stellar post-pandemic performance the rate of price growth is slowing, but a scarcity of new prime supply and renewed demand from pivotal markets like China and India will see it remain in positive figures.”
