According to the real estate consultant Knight Frank, Dubai has climbed to the top of the global sales statistics for the biggest number of super-prime residences selling for over one million dollars each.
The development coincides with the launch of real estate master developer Nakheel’s launch of its first luxury villas on the Palm Jebel Ali island. The project, which spans a total area of 13.4 sqkm, is reportedly twice the size of the Palm Jumeirah.
The masterplan of the palm-shaped luxury island was unveiled by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in early 2023.
The property units will have floor-to-ceiling windows that will reportedly offer a panoramic view of the private beaches. It will also possess a soft and neutral palette, with luxury finishes to match the exclusive private frond neighbourhoods.
“Health and wellbeing will be integrated into daily life on the four fronds, offering residents wide walkable streets. Pedestrians and cyclists will have access to the beach through pocketed parks. The front streetscape will be predominantly green, with trees offering ample shading,” commented a Khaleej Times report on the project.
“Palm Jebel Ali boasts the longest coastline of any destination in Dubai. Centrally located within Dubai’s future growth centre, it is connected via the Sheikh Zayed Road (E11). When completed, it will feature seven islands and 16 fronds, adding a total of 91km with three access points to the island,” it stated further.
The island, seen as a new growth corridor in line with the Dubai 2040 Urban Master Plan, will also house over 80 hotels and resorts as well as several unique retail and dining experiences.
The emirate, which since the COVID-19 outbreak has been drawing a growing number of high-net-worth individuals (HNWIs), has sold 95 residential homes with a price tag of more than USD 10 million each.
During the second quarter, the number of residences purchased by property purchasers in Dubai reached a record, surpassing the numbers seen in 11 other major markets, including New York, Paris, London, Hong Kong, Los Angeles, Geneva, Miami, Orange County, Palm Beach, Singapore, and Sydney.
Although London and New York both witnessed sales above USD 1 billion during the quarter, Dubai dominated the table with a total value of USD 1.5 billion, making it the leader in this category as well.
In the year leading up to June 2023, a total of 320 properties with a price tag of ten million dollars or more were sold in Dubai. This figure was also the highest among the cities monitored by Knight Frank.
According to research by Knight Frank, “Dubai continues to lead the pack,” but both London and New York are still experiencing “healthy volumes.”
Decoding The Record Revenue Flow
The total sales for the 12 cities in the second quarter were 422 homes with a combined value of USD 7.3 billion. This brings the total sales for the 12 months up to June to 1,638 residential units valued at slightly under USD 30 billion, which is a decrease from the peak of USD 40.7 billion recorded in 2021. The entire volume is still significantly higher than the amount before the pandemic, which was USD 18.6 billion in 2019.
Dubai continued to enjoy increased demand, recording a 79% gain in volumes between the second quarter of 2022 and the second quarter of 2023. This was despite the drop in other markets. The number of transactions in other markets, such as Sydney, Paris, and Geneva, increased by 46%, 17%, and 7%, respectively.
The most significant slowdown was observed in markets in the United States, led by Los Angeles, which had a 63% decrease in volume. The most significant factor in this reduction was the effect that increased interest rates had.
The report stated that “the biggest constraint across the majority of markets in the near term is supply.” This is because there will be no new development starts between 2020 and 2022, which will result in a lean 2024 for new deliveries. This will point to increased competition for available stock, which should place a floor under pricing.
“In spite of the slowdown, the market is still performing significantly better than it was before the pandemic,” stated the Destination Dubai report that Knight Frank published in 2023 beginning, as high-net-worth individuals from around the world are anticipated to spend USD 2.5 billion on real estate in Dubai in 2023.
About 22% of the 183 high-net-worth individuals surveyed by the firm said they would put away between USD 5 million and 10 million to invest in real estate in Dubai, while 8% said they would spend over USD 80 million.