A surge in property investment from high-net-worth individuals (HNWIs) between 2012 to 2022 has placed Dubai’s real estate market on a trajectory to achieve about $82 billion (Dh300 billion) in sales this year, according to a new report. Dubai real estate agency Unique Properties cites that the emirate houses over 68,400 HNWIs – a 62 percent increase in the past decade.
The Attraction of Dubai for HNWIs
It says Dubai has become a preferred destination for the world’s highly affluent to settle down in largely due to the UAE’s handling of the pandemic and the country’s convenient geographic location.
Tax Advantages and Favorable Policies Boost Growth
However, tax advantages and favorable policies, which global investors are becoming increasingly aware of, are also major contributing factors that have forecasted Dubai’s real estate market to witness 46 percent growth in 2023.
Increasing Demand for Luxurious Residences
Overseas turmoil has seen an influx of Europeans migrate to the UAE, and this trend is expected to continue. A predicted uptick in Chinese investors is also set to further drive growth in the luxury property segment of Dubai. The cosmopolitan city’s prime real estate market is on pace to see growth of nearly 14 percent throughout the year. Downtown Dubai, The Palm Jumeirah, and JBR are among the major districts spurring this growth.
Surging Prices and Daily Transactions
Increased demand for luxurious residences in these areas is seeing the price of high-end homes in Dubai spike from 6 percent to 7.9 percent in 2023, representing the highest value increase worldwide. Despite this surge, transactions over $270,000 are being recorded every day.
The Market’s Post-Pandemic Momentum
Arash Jalili, founder and CEO of Unique Properties, said: “Dubai’s real estate market has maintained its post-pandemic momentum, and this has unlocked the potential to shatter last year’s historic growth with HNWIs consistently relocating to the UAE.”
Strong Growth in the Real Estate Sector
According to the most recent data, total property transactions in April stood at 7,615, and real estate prices increased by an annual average of 14.5 percent, with the off-plan market spearheading this growth.
Dubai’s Rise on the Global Luxury Real Estate Scene
The Middle Eastern business hub racked up 219 sales of properties worth $10 million or more in 2022, according to property consultant Knight Frank LLP. By comparison, New York registered 244 deals worth $10 million or more, Los Angeles, 225 transactions, and London, 223. Dubai was also the fifth most active city for sales worth $25 million and above with 26 transactions.
Dubai – An Affordable Luxury Home Market
“Dubai has arrived,” said Faisal Durrani, head of Middle East research at Knight Frank. “The growing concentration of wealth in the city has been catalyzed by the confluence of factors, ranging from the government’s decisive response to the pandemic, to the roll-out of a range of new residency visa options.”
Still, Dubai is one of the world’s most “affordable luxury home markets,” ranking 16th in Knight Frank’s 20 global prime residential markets. In today’s market, $1 million will secure 1,130 square feet (104.98 square meters) of residential space in prime districts such as the Palm Jumeirah, Emirates Hills, or Jumeirah Bay Island – four times more space than in New York, London, or Singapore.
Dubai’s Irresistible Appeal
“Dubai’s market still represents outstanding relative value,” said Andrew Cummings, Head of prime residential at Knight Frank. “It is this value that continues to drive UHNWI buyers into our market, most of whom are seeking a sun-sand-sea lifestyle that is now synonymous with Dubai. The city’s appeal stretches right across the world.”
In conclusion, Dubai’s real estate market is an irresistible magnet for high-net-worth individuals in 2023. Property for sale in Dubai is thriving, offering an affordable luxury that appeals to global investors. As the city continues to evolve and attract HNWIs, it has established itself as a prime investment destination on the world stage.