Dubai is in the top five in sales of luxury real estate in the world

The international consulting agency Knight Frank has published a report, according to which in 2022 Dubai entered the top 5 most active luxury real estate markets in the world. In the overall ranking, the metropolis took 4th place. What does this mean for investors? How will the luxury real estate market change in the near future? We understand the article together with the experts of the OWRealty agency.

Luxury real estate in Dubai in the top 5 largest global markets

According to the Knight Frank Wealth Report 2023, Dubai's luxury residential property market is one of the top five in the world. In 2022, 219 deals were made in Dubai for the sale of ultra-luxury real estate at a price of $10 million. This is the 4th place among all metropolitan areas in the world.

In the highest market segment, Dubai was second only to the largest cities in the US and the UK. The first 3 positions in the ranking were occupied by New York, Los Angeles and London.

In 2021, 93 ultra-premium real estate transactions (more than $10 million) were recorded in Dubai. Thus, the number of such transactions for the year increased by more than 2 times. This indicates a sharp increase in interest in the most expensive lots from the richest people in the world.

Last year was record for the real estate market in Dubai. The total value of transactions exceeded $72 billion, which is 75% more than in 2021. This shows that Dubai's residential property market is booming and more investment-friendly than ever.

Prospects for the luxury real estate market in Dubai

According to OWRealty experts, Dubai's luxury real estate market is showing steady growth. Wealthy people from all over the world are interested in buying property in Dubai and the trend will continue. A number of factors contribute to this:

• Dubai's luxury real estate market remains one of the most accessible in the world. For 1 million dollars in the elite areas of Dubai, it will be possible to buy approximately 1,130 sq. m. feet of housing (105 sq. meters). This is 5 times the area of Hong Kong and 3 times the size of London.
• Dubai has a reputation as a paradise with a warm climate, where it is pleasant to relax, live and work
• The purchase of luxury real estate in Dubai worth from 545 thousand dollars entitles foreign citizens to the UAE Golden Resident Visa for 10 years.
• The UAE government is pursuing a policy of attracting foreign capital to the country, creating comfortable conditions for investment and starting a business
• The UAE takes a neutral position in international conflicts. This guarantees stability when investing large capital.
• In Dubai, a simple and convenient procedure for buying property. Housing can be bought for cash, mortgage or cryptocurrency. Operations are carried out online, for the transaction it is not necessary to go to the country.

Prices for luxury real estate in Dubai

It is luxury housing that remains the driver of price growth for the entire Dubai real estate market. Positive dynamics is provided by high demand in this segment.

According to Knight Frank, luxury real estate prices in Dubai in 2023 will increase by 13.5%. This is the highest figure among the largest metropolitan areas in the world.

At the end of 2022, in the most prestigious areas, prices for luxury real estate rose to 40-50%. This is explained by the lack of supply in the ultra-premium segment against the backdrop of high demand. Much of the land on the Gulf Coast in areas such as Palm Jumeirah, JBR etc., already built up. Not many new premium properties appear in elite locations, while the demand for them remains high.

Experts agree that luxury real estate in Dubai will continue to grow in price, but at a more moderate pace. This is a favorable factor for those who have already invested in real estate or plan to do so in the near future. In the future, housing can be profitably resold or rented out.

Investment in luxury real estate in Dubai

The growing demand for luxury real estate in Dubai makes it possible to consider it as a profitable investment. Owners who have already invested in premium housing are in an ideal position.

According to the authorities of Dubai, the city will be built inland. In the coastal areas and in the center of Dubai, due to the lack of free land, there will be less and less new objects. This will ensure a stable demand for ready-made housing in the premium segment.

Rental prices are on the rise (+24-27% in 2022), as is the influx of foreign nationals choosing Dubai as their place to live and work. Many foreign companies have relocated business to Dubai. By 2040, experts predict that the population of Dubai will grow to 5.8 million people (in 2022, the figure is 3.5 million people).

This means that the real estate market will only grow. Dubai has a reputation as a city where real estate investments pay off quickly, and this is indeed the case. OWRealty experts spoke in detail about investment strategies in real estate in Dubai In this article.

Given the rising trend in prices and demand, 2023 could be a good year for investing in luxury real estate in Dubai.