Dubai's ultra-luxury property market is severely undersupplied as much of the supply is being absorbed to unprecedented levels and affluent buyers are flocking to Dubai to cash in on attractive deals for high-end properties.

Due to the shortage of supply, industry executives say the number of deals for super high-rise properties will decrease in 2023.

"This market is the most in-demand and the most undersupplied. Since Covid-19, this market has boomed and most of the market supply has been absorbed by end users in this category. "This will inevitably lead to a decline in transactions in the secondary market in 2023, as most of the people who bought in the last three years have settled and have no intention of reselling, despite prices having soared.

Dubai attracts ultra-high net worth individuals for many reasons, including safety, security and low taxes. In addition, savvy investors are attracted to the quality of finishes and materials used in luxury properties in Dubai, as they use design elements from top brands.

In 2022, the Henry Global Citizen Report predicts that the UAE attracts 4,000 millionaires, the highest in the world.

As a result, the UAE's real estate sector has seen some record-breaking deals recently, such as the most expensive ultra-luxury flat sold for Dh410 million and a Dh600 million villa sold on the Palm Jumeirah - the most expensive property sold in the UAE.

Petri Mannila, sales director at Penthouse.ae, said interest from millionaires, mainly from Europe and the US, was driving demand, even as luxury property prices in Dubai continued to rise sharply.

"I have never seen so many high net worth individuals interested in moving to Dubai to live or do business. Demand for ultra-luxury homes in Dubai is at an unprecedented level as political and economic uncertainties in affluent Western markets, Russia and Asia continue to encourage the wealthy to turn to safe havens where they can protect and grow their investments," said Manilla.

Penthouse.ae was set up by Metropolitan Premium Properties to represent licensed developers, sellers and buyers in iconic Dubai locations, and its biggest deal last year was the Dhs80.35 million sale of a unit in the Bulgari Apartments.

"This is really a whole new area of the Dubai real estate market because two years ago, such deals were few and far between and almost non-existent - yet today, we are witnessing a market that could exceed Dhs35 billion in transactions this year," Manilla added.

Abdullah Alajaji of Driven Properties says developers are now racing to meet the unprecedented demand in this market to address supply issues.

"We believe that demand in the super premium market will continue to increase, although much of the new demand will have to be met by new schemes in the primary market," he added.