Knight Frank's data reveals that the ultra-high-end residential sales in Dubai reached an astounding $1.6 billion in Q3 this year, surpassing international metropolises like New York, Hong Kong, and London. This data indicates that Dubai's luxury real estate market continues to maintain robust development momentum.
Over the past few years, residential prices in Dubai have skyrocketed, with Knight Frank's report showing a 225% increase compared to the low point in Q3 2020.
Moreover, Dubai has held the top spot for annual property price increases for eight consecutive quarters. Although the quarterly price growth rate slowed from 11.6% in Q2 to 0.7% in Q3 of 2023, these figures still represent continuous growth for nine consecutive quarters. This is enough to illustrate that Dubai's real estate market still possesses strong allure and stable growth.
Looking ahead to 2024, Dubai is expected to continue attracting tourists, investors, and immigrants, maintaining stable growth in the real estate market. The UAE government is also focused on implementing economic and social initiatives to sustain long-term economic growth. These measures include the Golden Visa program, open trade with most countries, and hosting global events such as the upcoming COP28.
Furthermore, initiatives allowing foreign ownership of 100% in over a thousand businesses, the introduction of bankruptcy laws, improved ease of doing business, the introduction of multiple-entry tourist visas, and low taxation will continue to have a positive impact. As a whole, the UAE is working to maintain its status and reputation as a safe haven for investment amid global uncertainties, which will continue to drive investors to purchase primary and secondary homes.
Dubai's luxury home prices have seen a significant increase in the past 12 months. However, due to the attractiveness of its luxury home prices compared to global real estate markets like London and New York, investors are likely to continue flocking to Dubai in 2024.
According to Knight Frank's data, as of now, $4.91 billion has been spent on purchasing luxury homes in Dubai, with $1.59 billion spent in Q3 of 2023 alone on homes valued at $10 million or more.
Another driver of future growth in Dubai's luxury real estate market is the rebound in demand from markets such as China and India.
According to developer Emaar Properties, investment from China in the first half of 2023 doubled, accounting for 7% of its total sales, compared to 3% to 4% during the same period in 2022. For Chinese buyers, relaxed travel restrictions and the slowdown of the Chinese economy are driving them back to the Dubai real estate market.
In addition to the strong performance of the luxury housing market, branded apartments and townhouses are also luxury real estate trends that may continue to rise in 2024. In 2022, branded apartments accounted for one-fifth of all apartment sales value in Dubai, and demand for branded residences has only increased in 2023.
Recently, a buyer agreed to pay $55.3 million to purchase a five-bedroom Baccarat-branded apartment in Dubai, while in February of this year, a five-bedroom apartment at the Bulgari Residences was sold for $43.6 million. Estilo Architecture broke its own record set in 2022 by selling the highest-value property on the Jumeirah Palm Island to date, fetching $41 million.
According to Savills, by 2030, Dubai is expected to be the city with the most development projects in Europe, the Middle East, and Africa, indicating developers' confidence in this sector.
In terms of the economy, according to Standard & Poor's forecasts, the UAE economy is expected to grow by 4% in 2024, driven by the non-oil sector, benefiting from tourism growth, government initiatives, and technological advancements. A robust economy, continuous influx of foreign investments (due to its safe and stable environment), and a growing population will all contribute to the growth of the luxury real estate market in 2024.
