Global high-net-worth individuals are flocking to Dubai. According to Knight Frank, they are set to spend $4.4 billion on property in Dubai this year. This is a 76% increase from last year.
SPENDING PATTERNS ON REAL ESTATE IN DUBAI
Knight Frank's report also notes that HNWIs from the GCC region plan to spend an average of $3.1 million on a house in Dubai. In contrast, ultra-rich buyers from around the world will spend an average of $36.5 million per property. The report included interviews with 317 wealthy individuals. These individuals have an average net worth of $20 million globally and $8 million in the Gulf region.
GROWING INTEREST IN DUBAI REAL ESTATE
Faisal Durrani, partner and head of Middle East research at Knight Frank, says interest in investing in Dubai is very high. He explains that interest grows with personal wealth. Among those with $2 to $5 million, 28% have an interest in Dubai real estate. This interest jumps to 70% for those worth more than $15 million.
More than half of those with a net worth between $10 to $15 million are "very interested" in buying property in Dubai. Among those worth more than $15 million, this interest rises to 78%. So, wealthy individuals see Dubai as an attractive real estate investment opportunity. This means that the demand for luxury homes remains strong in Dubai.
POPULAR NEIGHBOURHOODS IN DUBAI
Top neighbourhoods for these buyers include Dubai Marina, Downtown Dubai, Business Bay, Dubai South/Expo City, Dubai Canal, Dubai Hills Estate, Palm Jumeirah, and Jumeirah Bay Island. In particular, Dubai’s gated communities like Dubai Hills Estate are increasing in attractiveness. Ultra-rich buyers seek properties for investment, capital gains, second homes, or rental purposes. Diversifying their portfolios also drives their investment decisions.
GOVERNMENT INITIATIVES AND MARKET GROWTH
Government initiatives have fueled the UAE property market's recent boom. These include residency permits for retired and remote workers and an expanded 10-year golden visa program. Economic diversification efforts also support the property market's growth.
Last year, Dubai's luxury market hit a record high. Sales of homes worth over $10 million almost doubled to $7.6 billion, outperforming London and New York. Prices for these high-end homes grew 26%, driven by overseas demand.
INCREASE IN DEMAND FOR DUBAI’S ULTRA-PRIME PROPERTY
Prathyusha Gurrapu, head of research and consulting at Cushman & Wakefield Core, sees a growing demand for ultra-prime properties. She attributes this to an influx of high-net-worth individuals (HNWIs) and more billionaires in the UAE. We see this through Dubai being the top destination for HNWI migration in 2022 and ranked second in 2023. This is according to Henley's Private Wealth Migration report. Moving on to this year, they also expect a 5% growth of global HNWI migration. A significant number of these individuals will likely move to Dubai.
REAL ESTATE INVESTMENT PREFERENCES AMONGST HNWI’S
A quarter of ultra-rich individuals with over $20 million in net worth plan to spend $60 to $80 million on a single acquisition in Dubai. Another 18% aim to spend $40 to $60 million. These investors prefer buying ready or new build properties. Here, 56% of respondents want completed properties, while only 14% have an interest in off-plan deals.
Durrani highlights that people want immediate possession of properties. He says, "People don't want to wait to take possession of a property, they want to move in now."
NEW REAL ESTATE DEVELOPMENTS IN DUBAI
Property developers are responding to growing demand with new projects. Emaar Properties, Dubai's largest listed developer, is no exception. For example, they recently launched a Dh55 billion ($15 billion) development near Al Maktoum International Airport. The project, called The Heights Country Club & Wellness, will feature townhouses and semi-attached villas. Alongside this, amenities will include a wellness centre, parks, and greenways.
So with major luxury projects like this continuing in development throughout Dubai, it's no wonder that properties in Dubai are in high demand amongst HNWIs
DUBAI’S PROPERTY MARKET STABILITY
Demand for ready properties worth over Dh30 million has doubled since 2022 and is stable. Prices for prime residential properties valued at $10 million rose by 18.2% in the first quarter of 2024. Overall residential prices increased by 20% during the same period.
Knight Frank predicts that residential prices in Dubai will rise by 3.5% in 2024. They also predict that prices for prime properties in Dubai will increase by 5%. Durrani sees no slowdown ahead either, indicating a continued strong demand.
HNWI’S CONTINUE BUYING PROPERTY IN DUBAI
Dubai's real estate market is ideal for those seeking strong real estate returns. This is no different when it comes to high-net-worth individuals. Government efforts, economic stability, and a wide range of properties make Dubai appealing to these individuals. So, Dubai's real estate market attracts lots of investment from these ultra-rich people. They seek high returns and luxurious living with Dubai matching both those desires. Dubai's thriving real estate market is therefore an ideal place for property investments.
