In 2023, Dubai Emerges as the Fastest Growing Hub for Luxury Real Estate
The Dubai real estate consulting company, Starling Properties, confirmed the increasing trend and influx of wealthy people worldwide to Dubai. That reflects positively on the growth in the value of luxury and ultra-luxury real estate in the emirate. Dubai joins the world’s five largest active luxury real estate markets, and a report issued by The company announced. The luxury real estate market in Dubai will achieve the highest growth rate among the luxury real estate markets in the world. This year, with a rate of 13.5%, outperforming cities such as Miami, which came second with an expected growth of 5%.
In its report, we discussed the real estate sector in Dubai for the first quarter of this year. The company stated that the average value of luxury homes in Dubai increased by 54.6% at the end of the first quarter of this year. Luxury in the world, as the average square foot value of sales transactions recorded by luxury real estate in Dubai in the past 12 months was 3360 dirhams per square foot. This is a competitive value compared to the rest of the major cities in the world.
The average value of ultra-luxury real estate in Dubai in the first quarter of this year amounted to 7,280 dirhams per square foot. A growth of 16% compared to the average value recorded in 2022. That amounted to 6,250 dirhams per square foot. The report pointed out that Dubai recorded 88 sales of ultra-luxury homes. Each value exceeded $10 million (36.7 million dirhams) in the year’s first three months.
According to the Starling Properties report, real estate values in Dubai increased by about 5.6% in the first quarter of this year, 2023, annually. For the ninth quarter in a row, real estate values in Dubai increased by about 20% compared to the first quarter. The average values are about 15% below the 2014 peak. On an annual basis, values rose by about 13%.
The values of residential apartments increased by 5.7% in the first quarter of this year to 1230 dirhams per square foot (= 0.09290 square meters). That increase of 15% compared to the first quarter, and despite the rise in values by about 12% over the past 12 months, it is still 18% below the 2014 peak.
According to Starling Properties data, the demand for residential apartments rose to a record high. That is the highest in the world, and by calculating a 16% increase in average traded values in the first quarter. The annual growth rate accelerated to 54.6%.
In parallel, villas continued their unique performance in the Dubai real estate market, with an increase of 5.1% between January and March. To reach 1450 dirhams per square foot, an increase of 15% compared to last year.
Across Dubai, villa values have increased by 44% since January, driven by strong demand for luxury homes since their sales peak 2014.
While the real estate market in Dubai witnessed a great demand for more expensive locations, moderate-cost locations also increased, with an increase in local demand for larger homes. In Dubai Hills Estate – for example – the square foot value reached 1825 dirhams, increasing values by 26 % in the past 12 months, making it one of the strongest gainers across Dubai.
The values of villas in Emirates Hills increased by about 18% in the same period to reach 2380 dirhams per square foot.
In its report, the company believes that the Dubai real estate market competes with the well-established real estate markets in the world.
The company ranked Jumeirah Palm, Emirates Hills, and Jumeirah Bay Island as the most popular places for the world’s wealthy. That reinforces Dubai’s global status as a second home for them.
The real estate market’s performance for luxury real estate in Dubai was in line with expectations of Starling Properties in the past 12 months. To reach an average value of 3360 dirhams (915 dollars) per square foot. Dubai remains one of the most affordable luxury home markets that, enhances the attractiveness of Dubai among international buyers.
However, the report predicted that values would continue to rise with strong demand from global high-net-worth individuals targeting second-home purchases. The values of villas in Dubai reached their peak levels in 2014, bringing them to what they were seven years ago. At the same time, the values of apartments are approaching the classes of 2014 by about 18%.
The report confirms that Dubai remains the world’s most affordable luxury home market, and it does not come as a surprise. It ranked 16th among the 20 major real estate markets worldwide.
Dubai joined the top 5 busiest luxury real estate markets in the world. It is driven by the strong demand for luxury housing, with a unit value of 1,130 square feet one million dollars. That is three times larger than units in cities such as London, New York and Singapore.
Dubai emerged as the fourth most active luxury market. The sales values of $10 million for 219 sales deals and homes sold worth $3.8 billion.
Dubai ranks fifth in the world in home sales valued at $25 million, and the diversity of Dubai’s buyer base contributed to the overall improvement in the luxury home market.