Dubai’s luxury property market is set to maintain its strong demand in the second half of 2023, making it the fastest-growing market among major cities worldwide. The influx of millionaires and a scarcity of high-end units are driving the remarkable growth in this segment.
During the January-June period, capital values saw an impressive 11.2% increase, and industry analysts predict an additional 5-10% surge in prices during the second half, maintaining the fastest growth rate for the entire year. Interestingly, the luxury segment’s performance is also positively influencing the capital value of mid and affordable units.
The recent launch of uber-prime properties and branded residences, including Bulgari Lighthouse, Como Residences, Baccarat Residences, and Six Senses Residences, has bridged the gap between Dubai’s ultra-prime market and other global cities, leading to record-breaking sales prices and robust sales absorption.
According to Savills Research, prime residential property prices in Dubai will grow by 6-7.9% in H2 2023, outpacing other major cities like Singapore and Bangkok. The city’s success in attracting ultra-high-net-worth individuals (UHNWIs) has been evident with a significant increase in average prime rents since December 2020.
To cater to the unprecedented demand, more than 15 projects were launched and almost sold out between June and July. This strong investor appetite is expected to continue well into 2024. Despite relatively high prices compared to the pandemic lows, the increased rental yield offers investors an attractive annual return on investment.
The ultra-prime and prime market in Dubai is witnessing robust demand from international and resident buyers, supported by favorable socio-economic factors. The successful launch and uptake of luxury properties further underscore the market’s strength.
Dubai’s luxury property segment has no price ceiling, with villas selling for Dh100 million to Dh600 million each. While there is still room for growth in luxury property prices, location, amenities, and product quality play a crucial role. One-bedroom apartments priced at Dh1.8 million are attracting buyers, while villas worth over Dh100 million are sought after by ultra-high-net-worth individuals.
Despite post-pandemic price increases, prime property prices in Dubai remain significantly more affordable compared to major cities like Monaco, Hong Kong, New York, London, Geneva, Paris, Beijing, and Tokyo.
Allsopp & Allsopp reported an impressive 176 deals exceeding $10 million in the emirate’s ultra-luxury property segment, surpassing London, Paris, and New York. A substantial increase in buyer registration has resulted in a 28% rise in overall sales, reflecting the growing interest in Dubai’s real estate potential.