Dubai’s Luxury Home Market Tightens as Millionaires Claim Prime Properties

The availability of luxury homes in Dubai has plummeted by nearly 50% over the past year, driven by a surge in demand from millionaires purchasing properties for personal use. According to Knight Frank, high-end communities such as Palm Jumeirah, Emirates Hills, and Jumeirah Bay Islands have seen a 47% drop in available properties, with only 2,851 luxury homes on the market.

Dubai's appeal to high-net-worth individuals (HNWIs) is reflected in the sales figures: 190 homes valued at over $10 million were sold in the first half of 2024, almost matching the 189 homes sold in the same period last year. The city also saw strong demand for ultra-luxury properties priced at over $25 million, with 21 homes sold in the first half of 2024, including 15 in the second quarter alone.

Surge in High-End Purchases

Knight Frank's data highlights that Palm Jumeirah leads the luxury market with 60 homes sold for over $10 million in the first half of 2024. Other notable areas include Palm Jebel Ali, Business Bay, Al Wasl, and Jumeirah Bay Island. Palm Jumeirah also topped the charts in terms of total sales value, with transactions worth nearly $993 million.

This trend is driven by both end-users and investors who prefer to hold onto these properties, anticipating further price appreciation. Michael Gelpke, CEO of Glam Properties, notes a diversification in investor profiles, with increased interest from European and Chinese buyers. Many investors are now planning long-term residency, contributing to the shift towards an end-user market.

Market Dynamics and Future Prospects

Faisal Durrani, Head of Research for MENA at Knight Frank, points out that the global super-rich are increasingly fixated on Dubai, overwhelming the supply of luxury homes. This has resulted in a 65.5% decline in the number of $10 million-plus home listings over the past year, signaling a 'buy-to-hold' mentality among buyers.

Dubai's luxury property market remains attractive due to its competitive price points and high capital appreciation potential. The city continues to draw millionaires, with a significant influx of HNWIs over the past decade, further bolstered by the UAE's Golden Visa program. Enhanced family benefits and streamlined application processes have made the program more appealing, fostering long-term residency and community living.

Akshay Nagdev, Business Head at Foremen Fiefdom, emphasizes the high demand for luxury villas in prime locations such as Dubai Marina, Downtown Dubai, and Palm Jumeirah. These areas offer a luxurious lifestyle, vibrant city life, and proximity to business hubs, making them particularly attractive to Golden Visa holders and their families.

Dubai’s luxury housing market is experiencing unprecedented demand, leading to a significant reduction in available properties. This trend underscores the emirate's appeal to global millionaires seeking high-end, long-term residences. With the continued influx of HNWIs and strategic initiatives like the Golden Visa program, Dubai’s luxury real estate market is poised for sustained growth and evolution.