The price of Dubai real estate in prime locations has shot up over the past year, rising as much as 88.8 percent, research from property consulting firm Knight Frank showed.
“Prime residential values in Dubai continue to strengthen, growing by 29 percent in Q3 alone, fuelled by a persistent deluge of UHNWI individuals who are zeroing in on Dubai’s premier districts, in search of second homes. This trend marks a significant departure to the emirate’s two previous market cycles, where the overriding flavour of buyers was linked to buy-to-let or buy-to-flip purchases,” Faisal Durrani, Knight Frank partner and head of Middle East research said.
In some locations, such as Palm Jumeirah, prices have risen over 100 percent compared to the start of the pandemic. Sales of ultra-prime houses, which refers to property priced at over $10 million, have also hit new heights, with 152 registered so far this year, eclipsing 2021’s 93. Of these 152 deals, 93 took place in the third quarter of 2022 alone.
“The bulk of international buyers are being drawn to Dubai’s unrivalled sun-sea-sand lifestyle, which tends to come with villa purchases, and this is where demand continues to intensify. Indeed, the city just set a new record price, with the sale of an $82 million home on the Palm Jumeirah,” Andrew Cummings, Knight Frank partner and head of prime residential said.
“At around AED3,200 per square foot, or about $870 per square foot, Dubai’s Prime residential neighbourhoods remain amongst the most affordable in the world. This, combined with the high quality of residential product now available in the upper echelons of the market, is cementing Dubai’s position as one of the world’s leading second homes markets.”
Knight Frank expects demand to continue increasing, with prices increasing 5-7 percent by the end of the year.
Prices for prime real estate are likely to end the year around 60-80 percent higher than in 2021. Prices on the Palm Jumeirah have already increased 101 percent, while prices on Jumeirah Bay Island have increased 98 percent.
“With increasing global economic uncertainty, Dubai is once again emerging as a safe port in the storm. The unrelenting demand from international UHNWI when combined with the shortage of waterfront homes, the government’s world-leading response to the pandemic, positive business sentiment, one of the most business-friendly environments anywhere and arguably some of the globe’s best beachfront real estate is what underpins our outlook,” Durrani explained.
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