A recent report by Knight Frank, a global property consultancy, reveals that high-net-worth individuals (HNWIs) worldwide are poised to invest $2.5 billion in Dubai’s real estate market this year. The study highlights the growing interest of HNWIs in Dubai, with 22% of them willing to commit between $5 million and $10 million, and 8% ready to spend over $80 million. East Asian buyers, in particular, demonstrate a higher propensity to invest, with many considering allocations exceeding $20 million for Dubai properties.
Last year witnessed $3.8 billion being spent on Dubai homes priced above $10 million. Knight Frank’s report surveyed 183 HNWIs globally, each possessing a net worth surpassing $3 million (excluding their primary residences). Collectively, this group owns 851 homes worldwide and possesses a combined net worth of $3.2 billion.
Faisal Durrani, Partner and Head of Middle East Research at Knight Frank, asserts that Dubai has reached a tipping point, transforming into a global magnet for the wealthy. Durrani attributes this transformation to Dubai’s exceptional transport infrastructure, unrivaled global connectivity, and visionary leadership, which have elevated the city’s reputation worldwide. The unrelenting demand from international HNWIs to own second homes or relocate to Dubai stands as a testament to its global stature.
The UAE’s real estate market has been steadily recovering from the impacts of the COVID-19 pandemic, supported by government initiatives, higher oil prices, and other measures bolstering the economy. Consequently, property transactions in Dubai and Abu Dhabi surged last year, driven by increased buyer demand.
Crown Prince Sheikh Hamdan bin Mohammed hailed Dubai’s property market performance in 2022 as “exceptional,” as deal values reached a new record of Dh528 billion, reflecting a 76.5% YoY increase. The Dubai Media Office reported a total transaction value of Dh157 billion in Q1 2023, marking an 80% annual increase.
Knight Frank’s report reveals that expanding property portfolios stands as the primary motivation for those with a net worth exceeding $10 million to invest in Dubai. Additionally, 47% of global HNWIs cited Dubai’s high-quality transport infrastructure as the top reason behind the emirate’s appeal as a real estate investment destination. Other contributing factors include Dubai’s emergence as a global tourism center, its successful recovery from the pandemic, and the availability of a wide range of projects.
For those who have never visited Dubai, the two leading attractions for real estate investment are its status as a global tourist destination and the absence of salary taxes, as per Knight Frank’s findings.
Shehzad Jamal, Partner of Strategic Consulting for Real Estate, Healthcare, and Education, emphasizes that Dubai’s world-class infrastructure, excellent connectivity, and proactive government policies have garnered attention from investors across Europe, East Asia, and the Americas. The influx of individuals relocating to Dubai has stimulated job creation and wealth generation, further enhancing the stability of the real estate market.
Among the preferred areas for wealthy investors eyeing property in Dubai, Downtown Dubai and The Palm Jumeirah emerged as the top choices, according to the survey. The Palm and Emirates Hills are favored by affluent investors from the UK, Europe, and North America. East Asian investors exhibit a preference for Downtown Dubai, closely followed by Business Bay.
Regarding residential property types, apartments dominate the preferences of global HNWIs, with 64% favoring them, according to the report. However, among those with a net worth surpassing $10 million, 53% prefer purchasing villas in Dubai.
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