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In Q1 2023, the cost of ultra-luxury real estate in Dubai increased by more than 27%, compared with last year's results for the same period. This success is due to the increased demand for premium-class apartments and houses against the backdrop of economic recovery.
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Current statistics
Luxhabitat Sotheby's report, based on data from the Dubai Land Department (DLD), the average cost of prestigious housing in the emirate increased to 25.2 million AED ($6.86 million), and the total volume of transactions in the segment reached 14.7 billion AED over a three-month period.
The average price per square meter of premium real estate increased by 21% and amounted to 3,373 AED.
The highest quarterly sales growth was recorded in the following areas of Dubai:
- Jumeirah Bay –220% to 2.05 billion AED;
- Al Barari – 168% to 926 million AED;
- Downtown Dubai – 49% to 3.4 billion AED
Reasons for growth in the premium segment
With the approach of Q2, the number of large transactions with premium housing continued to grow. This continuity is primarily fueled by the current lifestyle and wealth changes seen from incoming European buyers and the recent increased trend on the part of institutional investors to return to conventional asset classes. The supply of luxury turnkey real estate is still small, which increases demand.
The latest data comes against the backdrop of an ongoing boom in the UAE real estate market, caused by the recovery from the recession due to the coronavirus pandemic, against the background of government initiatives and a broader economic recovery.
According to Knight Frank last month, Dubai ranked fourth in the world in terms of activity in the luxury housing segment, as luxury real estate sales continue to grow.
Last year, 219 houses worth over $10 million were sold in the emirate, and the total value of transactions reached $3.8 billion. Thus, Dubai is not much inferior to New York (244 sales), Los Angeles (225 sales) and London (223 sales).
In Q1 2023, sales of luxury real estate in Dubai reached 6 billion AED, with wealthy buyers purchasing 88 units of real estate worth more than $10 million, according to another Knight Frank report last week.
Successful deals in 2023
4 of the 10 most expensive deals for the quarter were recorded in Jumeirah Bay.
Apartments in Jumeirah Bay were sold for an average of 91.2 million AED, with the most expensive of them being located in Bulgari Lighthouse and Bulgari Resorts and Residences.
In the luxury apartments segment, 1,584 residential units were sold for 9.8 billion AED in the first three months of the year, which is 66% of the total volume of the primary market, according to the data provided in the report.
The three leaders of this segment included Palm Jumeirah with sales of 3.7 billion AED, Downtown Dubai with sales of 3.4 billion AED and Jumeirah Bay with sales of 1.8 billion AED.
The average cost of luxury apartments increased by about 35% compared to the previous quarter and amounted to 28.4 million AED. According to Luxhabitat Sotheby's, off-plan housing sales accounted for 70% of all apartments sold in the first quarter.
Meanwhile, in Q1 2023, 294 first-class villas were sold for 5.6 billion AED. TOP-3 included Palm Jumeirah, Dubai Hills Estate and Al Barari.
