Knight Frank’s latest report released on Monday casts a spotlight on the escalating demand from the ultra-affluent for Dubai’s premium homes—a fervor that has engendered a significant shortfall in the luxury real estate sector.
Within Dubai’s choicest enclaves—Emirates Hills, the esteemed Jumeirah Bay Island, the serene Jumeirah Islands, and the iconic Palm Jumeirah—the availability of properties for purchase experienced a precipitous 47% plunge in the second quarter, dwindling to 2,851 homes in stark contrast to the previous year, the property consultancy divulged.
“The magnetism of Dubai for the world’s wealthy elite is exacting a toll on the city’s luxury housing inventory,” asserted Faisal Durrani, the research-savvy partner heading Knight Frank’s Middle East and North Africa divisions, underscoring the insight within the report.
Unfolding the narrative of a preceding analysis, Durrani elaborates, “Our findings discern that an influx of US$4.4 billion in global private capital is poised to infiltrate the residential sphere of the emirate within the current annum—marking an uptick of 76% relative to 2023. This surge quintessentially delineates the burgeoning international clientele and their unwavering pursuits, a pace of demand that developers are hard-pressed to match.”
The crunch in supply grows acutely discernible at the summit of the luxury pyramid. Homes with price tags equaling or surpassing the US$10 million mark observed a 65.5% year-on-year decrement in the second quarter, totaling a mere 460 listings.
“The spectacle here is not just the buoyant sales of Dubai’s most coveted properties, but the simultaneous and pronounced contraction of their market presence,” Durrani reflects.
A nuanced shift in investment mentality is becoming apparent, Durrani notes—purchasers in Dubai are now far more inclined to retain their properties for extended durations. The current trend leans towards acquisition for personal domicile over the speculative flips that characterized past market booms.
Cementing its status as a prime location for luxury dwellings, Dubai recorded an impressive count of 190 transactions exceeding the $10 million threshold throughout the year’s first six months, according to the report.
