Prices of luxury properties in Dubai rose by 48.8 per cent in the year to June, setting the pace once again as the world’s leading property market.
The strong price growth meant Dubai maintained top position in the Knight Frank Prime Global Cities Index, a well-respected international survey and a place it has now occupied for eight consecutive quarters. Since hitting a pandemic low in the third quarter of 2020, luxury property prices in Dubai have soared by 225 per cent. Real estate markets are in flux, so why is Dubai’s property scene booming?
Soaring demand for luxury homes has propelled Dubai above the more established centres for prime property for the first time, as the Gulf business hub’s post-pandemic rebound continues to attract the world’s wealthy, including Russian buyers. According to Knight Frank, Dubai was the busiest market for $10mn-plus homes in the first quarter of 2023, with 92 deals worth $1.7bn. By comparison, Hong Kong had 67 transactions valued at $988m, New York raised $942m in 58 deals and 36 sales were completed in London worth $736m.
Many of the world’s richest individuals are turning to Dubai as a financial haven, as they compete to snap up a limited stock of high-end properties. “Dubai’s luxury homes market continues to attract the attention of the world’s wealthy,” said Faisal Durrani, Knight Frank’s head of Middle East Research, adding that many were second homes.
Average annual prices rose 1.5 per cent across the 46 markets covered by the Knight Frank Index in the 12 months to June. That is markedly lower than the peak of 10.2 per cent seen in the last quarter of 2021, but is the strongest rate of growth since the third quarter of last year.
“Global housing markets are still under pressure from the shift to higher interest rates – but the latest results from the Knight Frank Prime Global Cities Index confirm that prices are being supported by strong underlying demand, weak supply following disruption to new-build projects during the pandemic, and an ongoing return of workers to cities,” said Liam Bailey, global head of research at Knight Frank.
“As uncertainty over the direction of inflation appears to have reduced in recent months – price adjustments in many markets are likely to be less pronounced than was expected even three months ago.”