Dubai leads global luxury real estate with 147pc growth in five years: report

Dubai topped the luxury real estate market index with property prices soaring by 147% between 2019-2024, according to Knight Frank’s recent Wealth Report 2025.

The city’s prime residential sector recorded a 16.9% increase in prices by Q3 2024, on track to hit 20% by the year’s end. This surge has placed Dubai among the top performers in the Prime International Residential Index (PIRI), trailing only Seoul and Manila, added the report.

The population of individuals worth at least $10 million in the Middle East rose 2.7% last year, placing the region in fifth place in terms of global wealth.

Dubai’s luxury market sets new record for over $10-million home sales

Notably, almost 10% of the region’s High Net Worth Individuals (HNWIs) possess wealth exceeding $100 million - a far larger proportion than any other region - which hints at the scale of wealth generated by legacy energy economies.

Leads global prime residential market

Luxury real estate transactions in Dubai are at an all-time high. Between January and September 2024, total sales in the city reached nearly $31.9 billion, marking a 36% increase compared to the same period in 2023.

Dubai’s global dominance in the super-prime ($10 million+) market is evident, as it recorded 435 sales in 2024, surpassing the previous year’s 434 transactions.

Liquidity and market tightness drive demand

Dubai’s luxury property boom is fueled by rising liquidity, with cash purchases accounting for 89% of total sales in 2024

The high percentage of cash buyers highlights the influx of international capital seeking prime real estate opportunities in the emirate. Additionally, mortgage-backed purchases are increasing, aided by lower interest rates that have improved affordability.

However, while transaction volumes have soared, supply has tightened significantly.

The number of available properties in Dubai’s super-prime segment fell by 65% over the past year, creating fierce competition for luxury assets. This shortage is expected to further drive price appreciation in 2025, with prime real estate values forecasted to rise by an additional 5%.

Dubai Real Estate Sector Strategy 2033 aims for AED 1 trillion market valuation

Emerging luxury hotspots: Palm Jebel Ali and Business Bay

New prime locations are emerging in Dubai’s ever-evolving luxury real estate market. Palm Jebel Ali, the city’s second palm-shaped island, recorded nine $10 million+ sales in Q3 2024 alone, contributing to a total of $1.1 billion in luxury transactions between January and September 2024.

This area now accounts for 24.4% of Dubai’s high-end property sales, highlighting its growing appeal among wealthy investors.

Downtown Dubai and Business Bay remain hotspots for luxury real estate.

Property prices in Downtown Dubai surged 13.7% in 2024, reaching $765 per square foot. The area’s appeal is underscored by a record-breaking $21.8 million sale at a Kempinski residence.

Business Bay, characterised by premium waterfront living, is also attracting a wave of investors and high-net-worth buyers.

Outlook for 2025: continued growth amid limited supply

With limited luxury property listings and an increasing population of ultra-rich individuals, Dubai’s real estate market is poised for continued growth.

The scarcity of high-end homes, particularly in the $10 million+ segment, will keep demand high, further solidifying Dubai’s position as a global hub for affluent investors seeking exclusive real estate opportunities.

Copyright Business Recorder, 2025