Ultra-Prime Residential Sales in Dubai is Setting New Record in 2022

Residential values in Dubai have continued to grow throughout Q2 and are currently 10.1% higher than last summer, with prices standing at an average of AED 1,100 psf.

?“Price rises in Dubai have been sustained in Q2, we have noted a slowdown in the rate of growth. Nonetheless, the mainstream market has seen a growth of 10.1% in the last 12 months, with villas continuing to lead the charge. In fact, villa values are now 19.3% higher than this time last year. The emerging tone for pricing is one of the less steep rises”.

Faisal Durrani, Partner – Head of Middle East Research

Faisal Durrani's take on Outperforming Villas

''Villas at the very top of the price spectrum in Dubai’s most expensive neighborhoods continue to record strong price growth, which is lifting entire markets. On Palm Jumeirah, villa prices have grown by 51% in the last 12 months and by 68% since the onset of the pandemic, highlighting the extreme depth of demand for the city’s premiere homes. Not to be outdone, prices for villas in District One and Dubai Hills Estate have also expanded by an impressive 30% over the same period''.

Very tight supply at the top-end of the market

The record price growth is fueled by the strong demand for the city’s most alluring neighborhoods, combined with restricted supply.

Across ‘Prime Dubai’, i.e. Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island, just 8 new projects are expected to be completed between 2023 and 2025.

Durrani said, “The severity of the shortage of new supply, combined with insatiable international demand has driven prime residential prices up by an extraordinary 70.3% in the last 12 months. The caveat to this stellar growth is that average transacted prices in these exclusive precincts stand at AED 2,900 psf, or $ 800, making Dubai one of the most ‘affordable’ luxury residential markets in the world – it is in fact four times cheaper than prime neighborhoods in New York, or London.”

Another record year for ultra-prime sales

The $10 million home sales continue to intensify with a new record as the market has already registered 82 ultra-prime deals in the first six months of 2022, whereas in 2021, which was an all-time record, it had recorded a total of 93 ultra-prime sales in total. In 2021, over 40% of all ultra-prime house sales in Dubai were reported.

According to Knight Frank's estimate, 2022 is on track to outperform this in certain ways, as purchasers for Dubai's most luxurious homes continue to flood in from all over the world.

According to the agency's research, buyers and investors from South America and Eastern Europe are joining the diverse mix of second-home purchasers and investors from Monaco, Austria, Switzerland, India, Singapore, mainland China, the UK, the US, and the GCC.

Knight Frank forecasts that prices would conclude the year 5-7% higher than in December 2021, while prime Dubai will see a 15% increase over the same time.

Key Takeouts:

• As of July 2022, the average psf for residential areas is AED 1100; 10.1% higher than last summer.
• Palm Jumeirah, villa prices have grown by 51% in the last 12 months and by 68% since the onset of the pandemic.
• ?Prices for villas in District One and Dubai Hills Estate have expanded by 30% over the same period last year.
• The average psf transacted for prime residential areas is AED AED 2,900 or $ 800
• Dubai recorded 82 transactions of $10 million homes in the first 6 months of 2022.

Reference* Knightfrank