Prime residential values in Dubai are poised to continue their upward trajectory in 2024 after achieving the second-highest growth rate globally in 2023. Knight Frank's 2024 forecast places
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Dubai in the third position globally with a growth rate of 5.0 percent. This follows an estimated 16 percent rise in prime residential prices in 2023 and builds on the 44.4 percent increase registered in 2022.
Out of the 100 markets tracked in Knight Frank's Prime International Residential Index, 80 recorded flat or positive annual price growth. Globally, luxury property prices increased by an average of 3.1 percent in 2023. Manila led the rankings with 26 percent growth, followed by Dubai at 15.9 percent, and The Bahamas at 15 percent. The Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island in Dubai experienced record growth in prime residential values during 2023, though this growth was from a low base.
Faisal Durrani, Partner and Head of Research at Knight Frank Mena, noted a 38.5 percent decline in the total number of prime homes available for sale in Dubai in 2023. This trend, echoing a 52 percent decrease in sales inventory in Dubai’s Burj Khalifa, suggests a longer-term residency mindset among buy-to-hold purchasers, contributing to sustained price growth in the prime market.
The luxury real estate market in the UAE is expected to remain robust in 2024, driven by sustained demand from foreign investors. Dubai's positioning as one of the world's most affordable luxury markets, coupled with the diverse range of prime properties available, has made it a destination of choice for high-net-worth buyers and business investors. The luxury real estate industry is adapting to the changing economic environment by incorporating technological integration, immersive virtual experiences, and sustainable practices, including smart houses, eco-friendly architecture, and wellness-focused amenities.
Despite record-breaking sales of luxury homes in Dubai, the city remains one of the most affordable luxury markets globally, with $1 million securing 979 square feet of residential space, three times more than in London, New York, or Singapore, and significantly more than Monaco, the top-ranked market. Dubai's relative affordability, combined with an unparalleled lifestyle offering, is attracting international second home buyers, and residents are staying longer, fostering the emergence of highly sought-after communities.
An analyst at a real estate consultancy predicts that Dubai and Sydney will be the top performers in the real estate market in 2024 based on the analysis of prime residential capital value growth in 30 major cities worldwide.