What's behind the 65% decrease in Dubai's luxury home listings?
The international appetite, particularly among the ultra-wealthy, may be the reason behind the recent plummet
190 deals over $10 million recorded in H1.
Sales of homes over $25 million up by 25% in Q2.
The number of homes available for sale in Dubai's prime residential markets — Emirates Hills, Jumeirah Bay Island, Jumeirah Islands, and Palm Jumeirah — has plummeted by 47% over the past year. In the second quarter alone, luxury home listings in Dubai overall dropped by 65.5%. But this significant drop is not due a lack of interest from investors.
So what's driving the trend?
The international appetite -- particularly among the ultra-wealthy -- is intensifying, with developers are struggling to meet the growing demand. Around $4.4 billion of global private capital is targeting Dubai’s residential market this year — a 76% increase from 2023, according to a real estate consultancy Knight Frank's 2024 Destination Dubai report.
"The global super-rich remain fixated on Dubai, leading to an overwhelming demand for luxury homes in the city. This surge in interest for properties in Emirates Hills, Jumeirah Bay Island, Jumeirah Islands, and The Palm Jumeirah has significantly reduced the number of available homes in these areas over the last 12 months," said Faisal Durrani, Partner and Head of Research, MENA at Knight Frank.
Average transaction prices in these affluent neighborhoods reached AED 3,706 per square foot in the first half of 2024, marking a 7% increase from the same period in 2023. Palm Jumeirah led the market with 853 home sales, accounting for 89.3% of prime transactions in the first half of the year, followed by Jumeirah Islands (5.03%), Jumeirah Bay Island (3.56%), and Emirates Hills (1.05%).
Robust market for $10 million+ homes
Knight Frank reported a record 431 sales above $10 million in 2023 — 80% higher than London, the next closest contender. The trend has continued with an additional 190 sales in the first half of 2024.
“The continued growth in Dubai’s $10 million+ homes market is extraordinary, especially given the prolonged decline in the number of luxury homes available. Listings for homes priced over $10 million fell by 65.5% over the last year to just 460 properties," said Durrani.
This indicates a shift towards a 'buy-to-hold' mindset among buyers, with many high-net-worth individuals purchasing homes for personal use rather than for flipping, he added
The total value of $10 million+ homes sold in the first half of the year reached $3.2 billion, building on the $7.7 billion recorded in 2023.
Palm Jumeirah led the luxury market in Q2 with 21 deals worth over $10 million, totaling $365 million, accounting for 26% of sales by value. Emirates Hills and District One followed with 10% and 7.8% of sales, respectively.
Growth in $25 million+ homes market
Will McKintosh, Regional Partner and Head of Residential, MENA, highlighted the strong demand in the $25 million+ segment: “The number of $25 million+ home sales grew by 25% in the last three months alone, reaching 21 for the first half of 2024. This is remarkable considering the average annual sales in this price range were less than three between 2015 and 2021," he said.
As Dubai's luxury real estate market continues to thrive, the city remains a top destination for the world's wealthiest buyers, driving significant demand and reshaping the landscape of its prime residential markets.
Popular
Spotlight
More from Business
Pakistan stocks surge to all-time high amid strong market activity
KSE-100 index gained 1.76% to close at 110,810 points
Comments
See what people are discussing