Dubai's prime residential market has become the fourth most active in the world, with 219 sales of homes over $10 million last year, behind New York (244), Los Angeles (225) and London (223), global real estate consultancy Knight Frank said in its Wealth 2023 report.

According to Knight Frank, Dubai's prime residential areas are the Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.

According to the report, Dubai is now also the fifth most active city for $25 million home sales, with 26 last year, behind London (43), New York (43), Los Angeles (39) and Hong Kong (28).

About the report, Faisal Durrani, Partner - Head of Middle East Research, said." Dubai has arrived. The emirate has taken its place among historic hub cities as one of the world's most sought-after markets for luxury property."

However, Durrani notes that the luxury residential market in Dubai is still clearly in short supply.

"Only eight new villas are expected in the city's main neighbourhoods until 2025 - and it is more affordable than its global peers, adding to the overall appeal of owning a Dubai home among the world's elite," he notes.

In fact, in Dubai's prime residential areas, US$1 million equates to 1,130 square feet of space, roughly five times that of Hong Kong and three times that of London or Singapore, Durrani explained.

"These factors have fuelled business and economic confidence and in turn have helped increase demand for luxury homes," he added.

Knight Frank also noted that the diversity of Dubai's buyer base has contributed to the performance of the market as a whole.

"With the world's strongest growth rate for prime residences expected to be 13.5% this year, Dubai's market continues to represent outstanding relative value. It is this value that continues to drive ultra-high net worth buyers into our market, the majority of whom are seeking a sun and sea lifestyle that is synonymous with Dubai," said Andrew Cummings, Partner - Head of Premier Residences.

"The city's appeal is global, but in 2022 we are seeing a pick-up in investment from our traditional, long-standing stalwarts in the buyer nationality charts. This shows continued interest from the UK and India as well as Europeans, whose investment has slowed but picked up in 2022. Chinese investors have also bounced back after the pandemic, making residential investment in the Middle East very lucrative," he added.

Knight Frank's Wealth 2023 report also includes the results of its annual attitudes survey. 500 private bankers, wealth advisors and family offices were interviewed around the world and respondents in the Middle East ranked the UK (85%) as the most popular target for residential investment in 2023. The UAE (48%) ranked second, followed by the US (37%) in third place. France and Switzerland rounded out the top five.

Partner - Head of Strategic Advisory - UAE, Real Estate, Healthcare and Education, Shehzad Jamal said." Another notable difference in investment strategy between Middle Eastern UHNWIs and their global counterparts is that they are significantly more office orientated."

"At 63%, offices are the single most preferred non-residential sector for Middle Eastern UHNWIs, well above the global average of 43%. Logistics and industrial (41%) came in second place," he noted.

"With rising demand for office and warehouse space in major Middle Eastern cities such as Dubai, Abu Dhabi and Riyadh, against a backdrop of record high occupancy rates and a limited development pipeline, it is easy to see why office and warehouse space is an attractive target for some," he added.