Dubai’s real estate market has recorded a significant surge in ultra-luxury home prices in Q1 2023, as the demand for prime property continues to grow amidst the emirate’s broader economic recovery. According to Luxhabitat Sotheby’s, the average price of a prime property in Dubai has risen to $6.86 million, marking an increase of over 27% compared to the previous quarter.
Luxury Home Sales Volume and Growth
The report also states that the total transactions in the ultra-luxury segment reached Dh14.7 billion, with the highest quarterly growth in sales volume recorded in Jumeira Bay at 220% ($2.05 billion), followed by Al Barari with about 168% sales growth ($926 million) and Downtown Dubai with a 49% sales increase ($3.4 billion).
Factors Driving Demand
The current lifestyle and wealth shifts from incoming European buyers and the increased trend of institutional investors moving back into bricks and mortar asset classes are the primary factors fueling the continuity of high-volume residential transactions within the super-prime luxury segment, according to Chris Whitehead, Managing Partner at Luxhabitat Sotheby’s International Realty. Moreover, prime turnkey properties remain in low supply, thus boosting demand.
Luxury Apartment and Villa Sales
Luxury apartments continue to be the top choice for buyers, accounting for 66% of the overall prime market, with 1,584 units sold for Dh9.8 billion in Q1 2023. The top three areas for the segment were The Palm Jumeirah, Downtown Dubai, and Jumeira Bay. Meanwhile, 294 prime villas sold for Dh5.6 billion, with The Palm Jumeirah, Dubai Hills Estate, and Al Barari emerging as the top three areas for the segment.
Price per Square Foot and Average Cost of Prime Property
The average price per square foot of a prime property rose by 21% to Dh3,373. Jumeira Bay recorded the highest average price per square foot at Dh10,594, followed by The Palm Jumeirah at Dh3,106 and Emirates Hills at Dh2,396.
In the first quarter of 2023, the average cost of a prime apartment rose by 35% quarter on quarter to Dh28.4 million. Meanwhile, the average cost of a prime villa in the same period rose by 37% quarter on quarter to Dh36.8 million.
Dubai’s Luxury Residential Market Ranks Fourth in the World
Dubai’s luxury residential market has been ranked as the world’s fourth-most active market, with sales of prime properties continuing to pick up, according to Knight Frank. In 2022, the emirate recorded the sale of 219 homes priced above $10 million, with the total value of transactions reaching $3.8 billion.
Conclusion
Dubai’s real estate market is booming, driven by high demand for prime property, a broader economic recovery, and government initiatives. The surge in ultra-luxury home prices in Q1 2023 and the ranking of Dubai’s luxury residential market as the world’s fourth-most active market indicate a positive outlook for the emirate’s real estate industry.