Dubai’s luxury real estate market is experiencing an unprecedented shortage of high-end properties as demand from ultra-wealthy buyers continues to outpace available inventory, a new report finds.
Listings from prime residential properties in Dubai’s most sought-after neighbourhoods have plummeted by 47 percent over the past year, highlighting a growing imbalance between supply and demand in the emirate’s luxury housing sector as it continues to experience a major market boom, according to a new report by Knight Frank.
The global property consultant’s latest analysis revealed that the number of homes available for sale in Dubai’s prime residential markets – including Emirates Hills, Palm Jumeirah, Jumeirah Bay Island, and Jumeirah Islands – has fallen to just 2,851 properties in Q2 this year, down from 5,376 in the same period in 2023.
This dramatic 47 percent reduction in listings underscores the intense competition among wealthy buyers for Dubai’s most desirable addresses.
“The global super-rich remain fixated by Dubai, which is overwhelming the supply of luxury homes in the city,” said Faisal Durrani, Partner and Head of Research for MENA at Knight Frank.
“Indeed, the volume of demand for property in Emirates Hills, Jumeirah Bay Island, Jumeirah Islands and The Palm Jumeirah has resulted in a 47 percent drop in the number of homes available for sale in these areas over the last 12 months.”
Dubai’s luxury real estate boom
The surge in demand is particularly evident in the ultra-high-end segment of the market. Dubai recorded 190 home sales priced above $10 million in the first half of 2024, nearly matching the 189 such transactions seen in the entirety of the first half of 2023. Even more striking is the growth in $25 million-plus home sales, which increased by 25 percent in the second quarter of 2024 compared to the first quarter.
This trend aligns with findings from Knight Frank’s 2024 Destination Dubai report, which identified $4.4 billion of global private capital actively targeting the emirate’s residential market this year – a 76 percent increase from 2023.
“This clearly highlights that the international buyer appetite, particularly among the uber-wealthy continues to strengthen and developers appear unable to keep pace with demand,” added Durrani.
The scarcity of available properties is most acute in the $10 million-plus category, where listings have plummeted by an astonishing 65.5 percent over the past 12 months to just 460 properties.
“Even further up the price spectrum, demand remains extremely robust, with the number of $25 million plus home sales growing by 25 percent in the last three months alone, taking the tally for the first half of 2024 to 21,” said Will McKintosh, Regional Partner and Head of Residential for MENA at Knight Frank.
“What is remarkable about this figure is that the average number of $25 million plus home sales between averaged less than three a year, between 2015 and 2021.”
The Palm Jumeirah continues to dominate Dubai’s luxury real estate landscape, accounting for 89.3 percent of prime deals in the first half of 2024 with 853 home sales. It also led in the $10 million-plus segment, registering 21 such transactions worth a total of US$365 million in the second quarter alone.
Despite the supply constraints, Dubai’s prime residential market has seen strong price appreciation. Average transacted prices in the emirate’s most affluent neighborhoods reached AED 3,706 per square foot during the first half of 2024, representing a 7 percent increase compared to the same period in 2023.
This sustained growth was attributed to a shift in buyer behaviour, with many international high-net-worth individuals now viewing Dubai real estate as a long-term investment rather than a speculative opportunity.
“This is a strong sign of the ‘buy-to-hold’ buyer profile that has taken root in the market, with anecdotal evidence continuing to suggest international HNWI are largely focussed on purchasing homes in the city for personal use, rather than to ‘flip’, which was a defining feature of the previous two market cycles,” said Durrani.
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