During the third quarter, Dubai has once again solidified its position as the leading global hub for luxury real estate, with an astonishing $1.59 billion injected into high-end properties, according to data released by Knight Frank LLP.
The demand for homes valued at $10 million or more has been nothing short of remarkable, with a record-breaking 277 such properties changing hands in the first nine months of this year alone, amounting to a staggering $4.91 billion in transactions. This surge has positioned Dubai well ahead of other renowned cities like New York and Hong Kong in the luxury property market, according to experts from the property consultancy firm.
Faisal Durrani, Head of Middle East Research at Knight Frank, commented on the resilient demand in Dubai’s luxury real estate sector, stating, “Demand for luxury homes in Dubai remains resilient and supply continues to stubbornly lag demand. The extraordinary run of price rises in this third market cycle has seen prices escalating for nine consecutive quarters.”
Dubai’s property market is currently in the midst of a significant boom, driven by the government’s adept handling of the pandemic and its liberal visa policies, which have drawn in a growing number of foreign investors. The luxury segment of the market, including opulent waterfront villas on the iconic man-made Palm Jumeirah islands, is experiencing a particular influx of wealthy buyers. This includes individuals such as Russians looking to safeguard their assets, cryptocurrency millionaires, and affluent Indians in search of second homes.
Historically, Dubai has been known for its cyclical property market, marked by sharp booms and busts. The most notorious downturn occurred in 2008 when a debt-fueled real estate crash pushed some of the city’s largest developers to the brink of bankruptcy. This time around, developers are being cautious, demanding substantial down payments from buyers before commencing construction. However, affluent homebuyers are also assuming more risk by opting to make significant cash upfront payments.
Among the preferred areas for wealthy buyers, the Palm Jumeirah reigns supreme, accounting for slightly over half of luxury property sales, as revealed by the report. Other sought-after neighborhoods include Emirates Hills and Jumeirah Bay Island, where home prices have surged by 16% compared to the previous year.
Interestingly, the more traditional district of Umm Suqeim 3, located near the iconic Burj Al Arab hotel, has also witnessed robust demand. Average prices in this area were an astounding 62% higher than its closest competitor, Business Bay, according to Knight Frank. Cash buyers have dominated the market, and the diversity of buyers has been described as “exceptional.”
Despite the ongoing demand, the supply of prime properties remains limited, particularly in the realm of luxury beachfront residences. Knight Frank anticipates that this trend is likely to persist for the foreseeable future.
Original article reference: Bloomberg.