Dubai’s luxury home sales hit $1.63 billion in the first quarter

Prime neighbourhoods of Palm Jumeirah, Jumeirah Bay Island and Emirates Hills account for 64% of sales priced at more than $10 million

Dubai’s luxury home sales hit Dh6 billion ($1.63 billion) in the first quarter of 2023, with wealthy buyers snapping up 88 units valued at more than $10 million as prime property sales continued to pick up amid a wider economic recovery.

The emirate’s prime residential markets of Palm Jumeirah, Emirates Hills and Jumeirah Bay Island accounted for 64 per cent of luxury home sales during the three-month period, with average transaction prices in these high-demand locations reaching Dh8,800 per square foot, global consultancy Knight Frank said in a report on Tuesday.

“The depth of demand for homes at this price point from local and international UHNWIs [ultra-high-net-worth individuals] is helping to drive up prices in this exclusive segment of the market,” Faisal Durrani, partner and head of Middle East Research at Knight Frank, said.

Dubai, the Middle East’s finance and tourism hub, registered average transaction prices of Dh7,235 per square foot in the first quarter for prime properties across the city — a 16 per cent increase on the Dh6,250 per square foot recorded in 2022, he added.

Dubai has been ranked as the world’s fourth-most active market in the luxury residential segment as sales of prime properties continued to pick up, Knight Frank said in March.

Last year, the emirate recorded the sale of 219 homes priced above $10 million, with the total value of the transactions reaching $3.8 billion. That ranks Dubai behind New York (244 sales), Los Angeles (225 sales) and London (223 sales).

Dubai’s economic recovery from the coronavirus pandemic on the back of higher oil prices and investor-friendly government policies, including changes to visa rules to attract more investment, have buoyed its property market.

The emirate’s economy expanded 4.6 per cent on an annual basis in the first nine months of 2022, with wholesale and retail trade accounting for 24.1 per cent of its gross domestic product, according to data from the Dubai Statistics Centre.

Emirates NBD estimates Dubai’s full-year 2022 growth at 5 per cent and expects the emirate’s GDP to grow by 3.5 per cent in 2023.

While Dubai’s prime neighbourhoods have dominated luxury home sales so far this year, other locations in the city are also rising quickly to prime status if they continue to entrench themselves as high-end neighbourhoods, the report said.

Up-and-coming areas include the Al Wasl-Dubai Canal and Tilal Al Ghaf, Knight Frank property experts said.

Branded residential sales at the Al Wasl-Dubai Canal corridor are “contributing to its emergence as a hotspot for UHNWIs who are focused on securing the most expensive homes in the emirate’s most desirable neighbourhoods”, Mr Durrani said.