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Sales over $10 million continue to drive Dubai’s luxury market forward

In 2023, Dubai took the top spot as the number one city for selling residential properties worth over $10 million. A remarkable 377 sales transactions were successfully completed at this luxurious price point

Sales over $10 million continue to drive Dubai’s luxury market forward
Lewis Allsopp, Chairman at Allsopp & Allsopp Group

In 2023, Dubai’s real estate market witnessed unprecedented growth and transformation, attracting attention worldwide. Transactions were recorded at record-breaking levels throughout the year, with off-plan and luxury properties seeing significant traction. This growth helped redefine Dubai’s real estate landscape, making it one of the most sought-after residential markets in the world.

Dubai recently experienced its busiest year ever, and November was the highlight when a long-standing property sales record from September 2014 was shattered. The average sales price per square foot reached an impressive new peak of AED 1,257. Dubai’s real estate market trumped all other similar markets thanks to strong growth fueled by investor and end-user trust.

Hence, it comes as no surprise that Dubai’s property market stands as a beacon of growth for markets worldwide as the market stands as a haven for investors despite socio-economic and geopolitical situations.

And while Dubai subsequently ranked first place in TripAdvisor’s world’s best destination, it also ranked as the number one city for residential property sales over $10 million in 2023 – just from 377 sales transactions completed over and above this price point according to our Allsopp & Allsopp Annual Property Market for 2023.

Prime luxury markets of Dubai

The number one location for prime luxury market sales was Palm Jumeirah – standing with 168 transactions, with some of the highest ranging from AED 220 million all the way up to AED 500 million, projecting that demand for waterfront areas will always be the first priority for buyers.

Demand for recently launched areas also soared throughout 2023, with Mohammed bin Rashid City, Tilal Al Ghaf, Palm Jebel Ali, and Jumeirah Bay Island holding the torch, all posting strong sales performance throughout the year. This offers a clear indication that Dubai’s luxury residential market footprint is expanding beyond the long-established super prime residential locations in just central Dubai.

What made each of these areas a stand-out performer goes beyond living ahead of central Dubai, but with demand for prime residential properties set to continue well into 2024, and a severe lack of new properties being handed over, buyers are holding onto what the market can offer dearly, with capital appreciations rising, rental premiums soaring and a continued growth through these areas, buyers and end-users are willing to pay premiums for this kind of lifestyle.

Lewis Allsopp, Chairman at Allsopp & Allsopp Group says, “Super prime sales are majorly being fuelled by international investors, which is not only circulating more money into the Dubai economy, but also creating more opportunities for sellers, who are planning to reinvest into the market. This has created a very strong ecosystem supported by not just local people purchasing homes in Dubai, but also international investors who are rediverting money from international markets such as the UK, or US into the UAE and Dubai market, specifically.”

Dubai’s market has seen a return of apartments through the rising demand for branded residences which have reshaped the buyer market to new means. We noticed trends of buyers opting to pay higher premiums as high as AED 500 million for branded apartments in prime areas such as Palm Jumeirah, Marsa Al Arab and Jumeirah Bay Island.

These areas are now seeing heavy activity of developers working around the clock to build new properties and welcome more branded residences onto the market to keep up with the rising demand.

Overall, we expect a high level of interest from buyers and investors across the prime residential and luxury segment. This is due to the demand for readily available secondary inventory, and the limited supply of new prime properties that are expected to come to market in the most prestigious locations in 2024.

These conditions will continue to drive sales prices upwards, resulting in sustained capital appreciation and high rental yield opportunities for properties within Dubai’s most desirable residential locations. Luxury homes priced over $10M have the potential for greater price increases than the market average due to demand from less price-sensitive buyers looking for long-term investments. Dubai’s stable real estate market also makes it an attractive option for international property diversification.