ALBAWABA - According to a report by "Destination Dubai" from Knight Frank, wealthy individuals are preparing to spend $2.5 billion on real estate in Dubai in 2023. The report is based on a survey of 183 individuals with a net worth exceeding $3 million. Collectively, these individuals own 851 properties worldwide, with a combined net worth estimated at $3.2 billion.
The report highlights the increasing interest of global billionaires in luxury homes in Dubai, particularly in Downtown (37%) and Palm Jumeirah (30%). For individuals with significant wealth from the United Kingdom, Europe, and North America, Palm Jumeirah (15%) and Emirates Hills (16%) emerge as preferred locations for purchasing residential units. Investors from East Asia favor Downtown (53%), followed by Business Bay (32%).
Faisal Durrani, partner and head of research for the Middle East, stated that Dubai's unparalleled global transport and communication infrastructure, along with its forward-thinking leadership, has enhanced its reputation and status worldwide. This is evident from the continuous demand from ultra-high-net-worth individuals for second homes or a complete transition to the emirate. Dubai has risen to the fourth position as the most active real estate market for luxury home sales in the world in 2022, following New York, Los Angeles, and London. The city recorded 88 luxury home sales valued over $10 million in the first quarter of 2023.
The strong demand from local and international high-net-worth individuals has led to a 16% increase in the average transaction prices for these luxury homes. Prestigious neighborhoods such as Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island continue to lead in sales. Emerging upscale residential areas such as The Water Canal, Dubai Hills, and Jumeirah Bay Island are also gaining popularity.
The report reveals that survey participants have allocated a significant amount of $2.5 billion for real estate purchases in Dubai this year. Notably, 22% of them are willing to invest between $5 million and $10 million, while 8% are ready to spend over $80 million. One of the key factors contributing to Dubai's attractiveness as a real estate destination is the availability of diverse projects, chosen by 38% of survey participants. For individuals with a net worth exceeding $10 million, this factor holds even more significance, with 51% and 38% of respondents from the United Kingdom and Europe, respectively, considering it a key factor.
Dubai usually adds around 30,000 to 35,000 residential units annually. Currently, approximately 94,000 units are under construction, expected to be delivered by the end of 2026. The wide range of housing options provided by these developments strengthens Dubai's position as an attractive investment destination.
The report highlights a shift in preference from off-plan properties to ready-to-move-in homes. Among the respondents, 53% of high-net-worth buyers focus on recently built homes, with this percentage rising to 71% among high-net-worth individuals from East Asia. Apartments are the most popular residential property type among the wealthy, preferred by 64% of respondents. However, among individuals with a net worth exceeding $10 million, 53% prefer to purchase villas in Dubai.
