An influx of millionaires since 2020 has transformed Dubai into one of the world’s hottest markets for prime real estate. But despite a steep increase in prices — 17.4% last year by one estimate — the emirate offers more value for money than most global cities.
“The market is still relatively competitively priced by global standards, at $850 per square foot, offers a comparatively low cost of living, a relatively easy visa process, and warmer climate which continues to attract international and domestic buyers,” Savills said in a report.
Cushman & Wakefield Core says more than 300 homes worth $5.4 million or more changed hands in the second quarter, a 12% increase. That’s after the city recorded 431 transactions worth at least $10 million last year, more than anywhere else, according to Knight Frank.
The United Arab Emirates is expected to attract more millionaires than anywhere in the world this year too and home values have continued to rise. Prices in the city increased 3% in the first half, according to Savills, against the backdrop of falling values in cities like London, Los Angeles, Miami and New York.
“If you look at what you are getting versus what you are paying, $1 million in Dubai gets you at least 1,000 square feet on average in three of the most prime residential areas as opposed to a city like Monte Carlo where you will get 172 square feet on average,” Muhammad BinGhatti, chairman of Binghatti Holding told my colleague Joumanna Bercetche on Bloomberg TV.
“I think the international buyer is noticing that day by day,” he said. “That’s bringing in the ultra-high net worth individuals.”
To be sure, Cushman & Wakefield Core said there had been a slowdown in off-plan prime real estate transactions in the first half, but attributed this to lower inventory at the top end of the market. Secondary sales remained steady.
To capitalize, Binghatti is among firms tying up with luxury brands on expensive apartments — such branded developments, by some estimates, account for a fifth of the market. The firm recently announced a Mercedes-branded tower, where apartments will cost up to $10 million; a tie-up with Bugatti on a project that will include elevators to transport cars to penthouses; and a partnership with jeweler Jacob & Co. on a 500-meter (1,640-feet) tower that’s set to become the world’s tallest residential building.
Meanwhile, others are resuming work on long-dormant projects. The scions of a billionaire developer are seeking to revive World Islands with beach-front mansions starting from $13.6 million. The Palm Jebel Ali project was restarted last year and drew hundreds of buyers who queued in the heat for for $5 million homes.
Still, Cushman & Wakefield Core cautioned the market as a whole is exhibiting signs of moderation and transaction volumes are plateauing. But across the city, prices continued their upward trajectory for the 16th consecutive quarter, with a 21% year-on-year increase. Since 2020, values are now up more than 60%.
“I think it’s the value proposition,” BinGhatti said, pointing to the relatively low prices in Dubai across the spectrum.
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