Global HNWIs to pour $2.5bn in Dubai property in 2023: Knight Frank

The world’s wealthy have been increasingly targeting Dubai’s luxurious homes, primarily situated in the city’s most desirable districts

by Kudakwashe Muzoriwa

May 31, 2023

Image credit: Getty Images

Global high-net-worth individuals (HNWIs) will spend $2.5bn on Dubai property in 2023, as the city is going toe-to-toe with the world’s long-established hubs as a magnet for the world’s wealthy.

Property consultancy firm Knight Frank’s inaugural Destination Dubai report revealed that about 22 per cent of the 183 HNWIs that it surveyed globally are prepared to commit $5m to $10m on real estate in Dubai, while 8 per cent are ready to spend more than $80m.

This group of global HNWIs own 851 homes around the world, have a combined net worth of $3.2bn and each with a net worth of over $3m.

“Dubai has reached a tipping point and instead of jostling for recognition, the city is going toe to toe with the world’s long-established hubs as a magnet for the world’s wealthy,” said Faisal Durrani, partner – head of Middle East Research at Knight Frank.

“Outstanding transport infrastructure, unrivalled global connectivity and an exceptionally forward-thinking leadership has catapulted Dubai’s reputation and status globally, as evidenced by the unrelenting demand from international HNWIs to own second homes here, or indeed relocate to the emirate.”

The world’s wealthy have been increasingly targeting Dubai’s luxurious homes, primarily situated in the city’s most desirable districts. Knight Frank said Downtown (37 per cent) and Palm Jumeirah (30 per cent) are the top favourite spots for global HNWIs.

For UK/European and North American HNWI, Palm Jumeirah (15 per cent) and Emirates Hills (16 per cent) emerge as preferred locations for residential purchases, the report revealed. While Downtown is a definite favourite location for East Asian investors at 53 per cent followed by Business Bay at 32 per cent.

Last year, $3.8bn was spent on homes priced at over $10m in the emirate.

Dubai’s unrivalled global appeal

Dubai emerged as the world’s 4^th most active market for luxury home sales last year, trailing just behind New York, Los Angeles, and London. The city recorded 88 home sales over $10m in Q1 2023, cumulatively exceeding Dhs6bn.

Meanwhile, the significant demand from both local and international UHNWI has boosted the prices of premium homes. The average prices for homes above $10m reached Dhs7,235 per square foot (psf) in the first quarter of the year, a 16 per cent increase from 2022’s Dhs6,250 psf.

Prime residential areas such as Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island continue to lead luxury sales, with prices averaging Dhs8,800 psf in Q1 2023.

These prime neighbourhoods constituted 64 per cent of Q1 sales for homes above $10m, with emerging areas such Al Wasl and Tilal Al Ghaf showing potential as future ‘prime’locales.

“Tilal Al Ghaf is a neighbourhood that has quickly joined Dubai’s growing list of ultra-luxe areas,” said Andrew Cummings, partner and head of Prime Residential at Knight Frank. “Three homes sold for over Dhs90m last year and seven villas transacted for over $10m in Q1 of this year, strongly suggesting that Tilal Al Ghaf will soon meet our definition of a prime neighbourhood.”

With several high-value transactions recorded over the last 12 months, neighbourhoods such as Al Wasl-Dubai Canal are gradually positioning themselves as hotspots for UHNWIs in Dubai’s property landscape.