Dubai prime home prices hit fastest growth rate after Manila

Prices of prime residential properties in Dubai rose by more than 16 per cent last year, the second-fastest pace globally, as demand continued to remain strong amid a broader economic recovery.

The values of homes that cost at least $10 million in the prime neighbourhoods of Palm Jumeirah, Emirates Hills and Jumeirah Bay Island reported record growth last year, property consultancy Knight Frank said yesterday.

Globally, luxury residential property prices rose by an average of 3.1 per cent last year, with Manila topping the list of 100 markets tracked by Knight Frank.

Prices in the Philippine capital increased by 26 per cent while the Bahamas was third, with a 15 per cent increase in prices. The Algarve in Portugal and South Africa’s Cape Town (both at 12.3 per cent) rounded off the top five.

“The total number of prime homes available for sale declined by 38.5 per cent in Dubai during 2023, echoing the 52 per cent decrease in sales inventory in Dubai’s Burj Khalifa over the same period,” said Faisal Durrani, partner and head of research for Mena region at Knight Frank.

This has helped to sustain price growth in the emirate’s prime market, he said.

Despite the record-breaking sales of luxury homes last year, Dubai is still ranked towards the bottom of the most expensive prime markets globally, the consultancy said.

With $1 million securing 979 square feet of space in any of the emirate’s three prime residential districts, the city was ranked 13th on the list of the world’s top 15 prime residential markets.

In comparison, $1 million buys only about 172 square feet in first-placed Monaco.

“Dubai remains one of the most affordable luxury markets in the world, which only adds to its appeal among the international elite,” Mr Durrani said.

Knight Frank expects prime residential values in Dubai to rise by 5 per cent this year, positioning the city as the third fastest-growing prime market globally, behind Auckland (10 per cent) and Mumbai (5.5 per cent).

Dubai’s luxury home market hit record levels in 2023 as sales of $10 million-plus homes nearly doubled to $7.6 billion, outstripping London and New York, Knight Frank said last month.

While sales within the price bracket rose by 91 per cent last year, about a third (28 per cent) of the 431 transactions were completed in the final quarter.

Dubai’s super-prime market – properties valued at more than $25 million – also surged last year as it recorded 56 deals worth $2.3 billion – double the previous year’s tally.