Cost of property in the emirate increased by more than 19 per cent last year, Knight Frank report says
The prices of villas in Dubai rose more than 20 per cent last year to Dh2,009 ($547) per square foot, as strong demand for luxury property continued to soar in the emirate amid reduced supply.
Villa prices are 38.1 per cent above the previous peak in 2014 indicating the “strong appeal of stand-alone villas, beachfront homes and branded residences that provide instant access to the Dubai lifestyle” for ultra-rich buyers, consultancy Knight Frank said in a report on Thursday.
The strong demand has resulted in a shortage of luxury homes in Dubai, with the number of homes available for sale for $10 million or more falling 40 per cent to only 2,491 last year. The number of homes available for $25 million or more also fell 85 per cent to only 86 properties in 2024, Knight Frank said.
This comes after the UAE established itself as the leading destination for wealthy people globally last year, attracting more than 6,700 millionaires, according to migration consultancy Henley & Partners.
Overall, house prices in Dubai surged by 19 per cent last year to Dh1,685 per square foot, with apartment prices up by 18.9 per cent to Dh1,640 per square foot.
Across Dubai, there has been a 30 per cent reduction in homes available for sale, with the prime markets in the city recording a 52 per cent reduction in availability.
“Residential property values remain on an upward trajectory, with demand showing no signs of abating, both from domestic and international buyers,” said Faisal Durrani, partner and head of research for the Middle East and North Africa at Knight Frank.
“Crucially, in this cycle, we have noted a rise in genuine end users, rather than speculative purchasers that have defined previous cycles.”
Dubai’s property market continues to perform strongly amid government initiatives such as residency permits for retired and remote workers, the expansion of the 10-year golden visa programme and overall economic growth and diversification.
The emirate recorded real estate deals worth Dh761 billion last year, up 20 per cent compared to 2023, with the total number of transactions for the year increasing by 36 per cent to 226,000, according to data provided by Dubai Media Office.
It also achieved a record in the sale of homes valued at more than $10 million last year, Knight Frank said in a report last month. The emirate recorded 435 home sales valued above $10 million,up from 434 home sales in 2023 in the same category, with the total value of deals reaching $7 billion.
By the end of the third quarter, Dubai exceeded other hot spots including New York, Hong Kong and Los Angeles for sales of homes valued at more than $10 million.
Prices in Dubai’s prime residential market including Palm Jumeirah, Jumeirah Bay Island, Jumeirah Islands and Emirates Hills also rose last year, with the average in the fourth quarter reaching Dh6,627 per square foot, up 16.9 per cent compared to the same period of the previous year.
“We are not yet seeing any sign of a slowdown and the demand is continuing to strengthen,” Mr Durrani told The National.
“It’s coming from new markets that we haven’t necessarily seen in the past. For instance, we’ve got anecdotal evidence about Turkish buyers being extremely active in the market too. At the moment … the city is very much seen as a global safe haven, a regional safe haven.”
Prices are projected to grow 8 per cent in 2025 for the whole market, while 5 per cent growth is expected for prime residential areas.
In terms of future supply, there are 302,880 units under construction in Dubai, with 80 per cent of them apartments and the remainder a mix of villas and branded residences, according to the report.
They are likely to be delivered by 2029, with an average completion rate of 60,576 homes per year for the next five years, higher than the long-term rate of about 36,000 homes per year, it said.
“While this appears higher than historic levels, there has been a 30 per cent lag in promised completions over the long term. With this in mind, Knight Frank highlights that just over half of the 60,000 promised homes in 2024 were delivered,” it said.
Source: thenationalnews