They are wondering why the arena’s richest are flocking to the Dubai property market. During this year, the world’s net worth individuals (HNWIs) are expected to spend a shocking $4.4 billion on homes in Dubai.

That’s an amazing 76% increase over the last twelve months. Dubai’s name for high-priced homes continues to grow, driving up property prices and making it a hotspot for the ultra-rich. 

Global Ultra-Rich To Spend $4.4bn To Buy Property In Dubai

The appetite for Dubai’s real estate market among the ultra-rich is evident. According to a new report, HNWIs are expected to spend an average of $3.1 million on a house in Dubai. 

In contrast, the global ultra-rich are likely to allocate an average of $36.5 million on property deals. According to a survey involving 317 wealthy individuals, with an average net worth of $20 million globally and $8 million in the Gulf region.

Faisal Durrani, a partner and head of Middle East research at Knight Frank, emphasized, “The appetite for investing in Dubai is still exceptionally high. The level of interest to invest in Dubai rises with the level of personal wealth growing, from 28% for those with $2 to $5 million, topping out at 70% among those worth more than $15 million.”

Who Are The Buyers?

Among those surveyed, 51% of respondents with a net worth between $10 to $15 million expressed a strong interest in purchasing property in Dubai. This interest rises to 78% for those worth more than $15 million. 

This trend is not just limited to one-time investments; the ultra-rich are considering Dubai properties for various purposes including investment, capital gains, second homes, holiday homes, or rental purposes. Additionally, they view it as part of their strategy to diversify their portfolios.

Popular Neighborhoods

So, where are these ultra-rich buyers looking to invest? Top neighborhoods in Dubai include Dubai Marina, Downtown Dubai, Business Bay, Dubai South/Expo City, Dubai Canal, Dubai Hills Estate, Palm Jumeirah, and Jumeirah Bay Island. These areas are known for their luxury amenities and prime locations, making them attractive to wealthy investors.

Driving Factors

Several factors contribute to the booming property market in Dubai. Government initiatives such as residency permits for retirees and remote workers, along with the expansion of the 10-year golden visa program, have significantly boosted the market.

The UAE’s overall economic growth, driven by economic diversification efforts, also supports the property market.

Last year, Dubai’s luxury prime market reached a record high. Sales of homes priced at $10 million and above nearly doubled to $7.6 billion, outperforming cities like London and New York. Prices for these luxury homes in Dubai grew at one of the fastest rates globally, increasing by 26% last year, driven by strong overseas demand for prime residences.

Also Read: UAE Property Sector Thrives In Q1 2024, Prices In Dubai Up 20.7 Percent: Report

The Appeal Of Dubai

Prathyusha Gurrapu, noted, “The growing demand for ultra-prime properties in Dubai is fueled by the influx of high-net-worth individuals to the emirate from other global locations and an increase in the number of billionaires residing in the UAE.” 

In 2022, Dubai was the top destination for HNWI migration, and it ranked second in 2023. This year, the global migration of HNWIs is expected to grow by 5%, with 128,000 HNWI migrants, a significant portion of whom are likely to move to Dubai.

Interestingly, the survey revealed that 56% of respondents prefer to purchase completed or newly built properties, while only 14% are interested in off-plan properties. 

This preference indicates that buyers want to move in immediately rather than wait for a property to be built. This trend has significant implications for the market, which has seen numerous new off-plan product launches in the past 12 to 18 months.

New Developments

As demand continues to grow, developers are launching new projects. Emaar Properties, Dubai’s largest listed developer, recently announced a new development worth Dh55 billion ($15 billion) near the Al Maktoum International Airport.

The Heights Country Club & Wellness will feature townhouses and semi-attached villas with amenities such as a wellness center, parks, ponds, and greenways.

Future Prospects

Looking ahead, the demand for existing ready properties worth over Dh30 million has doubled since 2022 and remains stable. New supply in the form of off-plan sales has increased significantly, though this segment still represents less than 1% of overall home sales in Dubai. 

Prices of prime residential properties valued at $10 million rose 18.2% year-on-year in Dubai in the first quarter, with overall prices increasing by 20%. Overall residential prices in Dubai will rise by 3.5% in 2024, with prime properties seeing a 5% increase. 

Faisal Durrani stated, “All the individual KPIs that we are monitoring on supply on demand, particularly from international buyers, do not point to any slowdown (in the property market) on the horizon.”

Abu Dhabi Market

While Dubai remains a focal point, Abu Dhabi is also attracting interest from the global ultra-rich. HNWIs are expected to spend a total of $408 million on property purchases in Abu Dhabi this year. The average budget for global HNWIs is $3.4 million, while wealthy residents plan to spend $900,000 on average.

In Abu Dhabi, 57% of respondents with a net worth of more than $15 million are keen to buy property. Aldar, Abu Dhabi’s biggest property developer, has announced new developments this year, including Nouran Living at Saadiyat Island. 

The emirate recorded an increase in sales transactions during the first quarter of 2024, with 2,660 deals for apartments and villas, marking a 17% rise compared to the same period last year. Villa sales prices rose between 10% and 15%, indicating strong demand for luxury properties.

Conclusion

The influx of the global ultra-rich into Dubai’s property market highlights the emirate’s growing appeal as a luxury real estate destination. 

With robust demand, supportive government initiatives, and an increasing number of high-net-worth individuals choosing to invest in the region, Dubai’s property market shows no signs of slowing down. 

As new projects continue to be unveiled and prices rise, the city is set to remain a prime choice for the world’s wealthiest investors.