Dubai’s prime residential market has emerged as the fourth most active in the world with 219 $10 million+ home sales last year, ranking just behind New York (244), Los Angeles (225) and London (223), said global property consultant Knight Frank in its 2023 Wealth Report.

According to Knight Frank, Dubai’s prime residential areas are The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.

As per the report, Dubai is now the fifth most active city for $25 million home sales as well, with 26 last year – ranking behind London (43), New York (43), Los Angeles (39) and Hong Kong (28).

On the report, Faisal Durrani, Partner – Head of Middle East Research, said: "Dubai has arrived. The emirate has taken its place among long-established hub cities as one of the world’s most sought-after luxury residential markets."

However, Durrani pointed out that Dubai’s luxury residential market remained significantly undersupplied.

"Just 8 new villas are expected in the city’s prime neighbourhoods until 2025 - and the fact that it is more affordable than its global counterparts is also adding to the overall appeal of owning a home in Dubai amongst the world’s elite," he noted.

Indeed, $1 million in Dubai’s prime residential precincts translates into 1,130 sq ft of space, roughly five-times more than Hong Kong and three-times more than London or Singapore, explained Durrani.

"These factors have fuelled business and economic confidence and have in turn helped to supercharge demand for luxury homes," he added.

Knight Frank also points to the diversity in Dubai’s buyer base, which has contributed to the overall market’s performance.

"With the strongest prime residential growth rate in the world forecast this year at 13.5%, Dubai’s market still represents outstanding relative value. It is this value that continues to drive UHNWI buyers into our market, most of whom are seeking a sun-sand-sea lifestyle that is now synonymous with Dubai," remarked Andrew Cummings, Partner – Head of Prime Residential.

"The city's appeal stretches right across the world, but in 2022, we saw a resurgence of investment from our traditional long-time stalwarts of the buyer nationality league table. This showed continued interest from the UK and India, as well as Europeans that had slowed down but picked up in 2022. Chinese investors have also bounced back post-pandemic, making Middle East residential investments very lucrative," he added.

Knight Frank’s 2023 Wealth Report also includes findings of its annual Attitudes Survey. 500 private bankers, wealth advisors and family offices were interviewed around the world, with respondents in the Middle East naming the UK (85%) the most popular residential investment target for 2023. The UAE (48%) is ranked second, with the USA (37%) following in third place. France and Switzerland round out the top five.

Shehzad Jamal, Partner – Head of Strategic Consulting – UAE, Real Estate, Healthcare and Education, said: "The other discernible difference in investment strategies between Middle East UHNWI and their global counterparts is their apparent heavier weighting towards offices."

"At 63%, offices form the single largest non-residential sector of preference for Middle East UHNWI, well above the global average of 43%. Logistics and Industrial (41%) follow in second place," he noted.

"With key cities in the Middle East such as Dubai, Abu Dhabi and Riyadh experiencing rising office and warehouse demand against a backdrop of record high occupancy levels and a restricted development pipeline, it is easy to see why offices and warehouses are attractive targets for some," he added.

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