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High-net-worth individuals (HNWIs) worldwide are ready to spend $4.4 billion on residential real estate in Dubai, according to global property consultancy Knight Frank.
The emirate’s luxury beachfront real estate has been a huge draw for millionaires.
According to a survey by Knight Frank, 20% of the global HNWIs were willing to put upwards of $60 million to purchase a home in Dubai (8% of whom were prepared to spend over $80 million). Meanwhile, 35% of the HNWIs were looking to purchase a home in the emirate for personal use. The average budget for this group stood at $46.8 million.
Knight Frank surveyed 317 HNWIs worldwide, of which 100 were from the GCC. The combined net worth of 217 HNWIs was $3.6 billion, with those from the GCC accounting for $660 million.
“Global HNWIs with a net worth of over $20 million are primed to spend an average of $58.5 million on a home in Dubai. The average budget for a residential purchase in Dubai by global HNWI is $36.5 million. At the other end of the spectrum, 26% of global HNWIs who are solely focussed on acquiring a residential investment in Dubai are planning to spend less than $5 million,” the report noted.
"Global HNWIs have been focused on Dubai’s most luxurious homes, and in particular, stand-alone, beachfront properties. This insatiable demand has propelled Dubai’s emergence as the busiest $10 million+ homes market in the world,” Faisal Durrani, Partner – Head of Research, MENA at Knight Frank said.
Dubai has been positioned as the world’s busiest $10 million+ home sales market with 431 units sold in 2023, at a total value of $7.6 billion, overtaking London and New York, at $4.3 billion (240 units) and $3.6 billion (211), respectively, according to the report, Destination Dubai.
“We expect the shortage of waterfront homes and rapidly diminishing number of ready-to-activate waterfront plots to continue sustaining upward pressure on waterfront home values, albeit price growth is likely to moderate in line with the rest of the city as we enter the fifth year of Dubai’s freehold residential market cycle," Durrani said.
Despite average house prices in Dubai having risen by 39% since January 2020, the emirate still took the first spot as the most preferred city in which to purchase a property, followed by Abu Dhabi.
“There is no doubt that Dubai’s live-work-play lifestyle has attracted global attention in the wake of the pandemic. And this attention has been matched by the unrelenting demand for real estate in the emirate, particularly by the global wealthy,” James Lewis, Managing Director, MEA at Knight Frank, said.
According to the report, the average allocated budget for a home purchase in Dubai by a GCC-based expat HNWI averaged at $3.1 million. Planned spending by this group was concentrated under the $5 million mark, with 61% prepared to spend up to $2 million, and the remainder prepared to go further and commit between $2 million to $4.9 million.
The desire to own a home in the city jumped from 28% for those with a net worth between $2 million and $5 million to 78% for those with a net worth in excess of $15 million.
It was the average budget of ultra-high-net-worth individuals (UHNWIs) that is noteworthy, with 25% prepared to spend between $60 million and $80 million on a home in the city, while a further 16% would like to spend over $80 million. Meanwhile, the average budget stood at $58.5 million, Durrani said.
Global appeal
According to Knight Frank and REIDIN data, 105 homes priced above $10 million were sold across Dubai during the first quarter of the year, up 15% on Q1 2023, while 12 homes valued over $25 million were sold in Q1 2024.
The total value of luxury homes sold during the first quarter stood at $1.73 billion, indicating an uptick of 2.2% on Q1 2023.
In Dubai, The Palm Jumeirah led demand, registering deals worth $628 million during Q1, dominated by $10 million+ transactions, which accounted for 36.3% of sales by total value. Jumeirah Bay Island (11.1%) and Dubai Hills Estate (7%) followed in second and third place, respectively.
The report also highlighted the broader appeal of investing in real estate in the UAE, with nearly half (49%) of those with a personal net worth more than $20 million surveyed saying they would also like to make a real estate investment in the country this year. A further 30% said they would like to acquire property in the UAE over the next 2-5 years.
Similarly, 54% of those with a net worth of between $5 million and $20 million said they would like to buy a property in the UAE this year.
East Asian HNWIs emerged as the keenest to buy real estate in the UAE, with 74% likely to do so within the next five years. Another 37% said they would like to make an acquisition during 2024.
(Reporting by Bindu Rai, editing by Seban Scaria)
