Dubai saw a record-breaking 431 homes sold for more than $10m last year and real estate prices in the luxury segment increased by almost 16%.
Despite this, it is one of the most affordable places to buy luxury real estate, according to international property specialists Knight Frank.
According to Knight Frank’s Wealth Report prime residential prices showed significant strength in 2023.
Luxury real estate in Dubai
Of the 100 markets tracked in Knight Frank’s Prime International Residential Index (PIRI), 80 recorded flat or positive annual price growth.
Luxury prices increased by an average of 3.1 per cent in 2023, with Manila (26 per cent) leading the rankings and Dubai (15.9 per cent) in the second spot.
The Bahamas (15 per cent) comes in third place with the Algarve and Cape Town (both 12.3 per cent) completing the top five.
Prime residential values in Dubai, which encompass the neighbourhoods of the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, have experienced record growth during 2023, albeit this has been from a low base, Knight Frank says.
Furthermore, Knight Frank’s 2024 global prime residential markets forecast positions Dubai in third place at 5 per cent.
This comes hot on the heels of an estimated 16 per cent rise in prime residential prices in 2023 and building on the 44.4 per cent rise registered in 2022.
Faisal Durrani, Knight Frank Partner and Head of Research, MENA said: “The total number of prime homes available for sale declined by 38.5 per cent in Dubai during 2023, echoing the 52 per cent decrease in sales inventory in Dubai’s Burj Khalifa over the same period.
“Owners are clearly deciding to hold on to their homes for longer, with inventory levels falling sharply, signalling the longer-term residency mindset now bedding in amongst the increasingly dominant buy-to-hold purchasers.
“Unsurprisingly, this behaviour has helped to sustain price growth in the emirate’s prime market, which registered the second fastest rate of growth globally in 2023 at 15.9 per cent.
“The accolades for Dubai’s prime market are piled high following the city’s record breaking 431 $10m-plus home sales, including an all-time high of 56 properties trading for over $25m last year.
“Despite the record-breaking sales of luxury homes, Dubai ranks towards the bottom end of the most expensive prime markets globally.
“Indeed, in our global tracker of 15 prime residential markets around the world, $1m secures 979sq ft of residential space, three-times more than London, New York, or Singapore and about 806sq ft more than first-placed Monaco, where $1m buys around 172sq ft of space.
“Dubai remains one of the most affordable luxury markets in the world, which only adds to its appeal among the international elite who dominate the upper echelons of the market”.
Will McKintosh, Regional Partner and Head of Prime Residential, MENA said: “Dubai’s residential market is no longer emerging. It has emerged.
“The nature of buyers in the market is testament to this shift, as is the type of real estate being developed in the city, much of which would not look out of place in other global cities.
“The city’s relative affordability, combined with an unparalleled lifestyle offering in one of, if not the safest cities in the world, means not only are international second home buyers zeroing in on the emirate, but residents in the city are staying for longer and putting down roots, which is fostering the emergence of highly sought after communities away from the luxury beach-front mansions.
“For instance, we found a balance in Jumeirah Islands, which offered both in terms of tranquil lake views, newly renovated contemporary style homes and convenient access to local amenities.”
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