Dubai’s prime residences set to lead global price rise says Knight Frank
New report shows demand in the emirate for high-end properties will outstrip supply in 2023
Prime residential prices in Dubai are set to experience the strongest price growth globally, according to property consultancy Knight Frank. Currently, top-priced neighbourhoods include The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.
Dubai’s perennial challenge has been its ‘build-it-and-they-will-come’ mantra, which has resulted in more homes being built than the market is capable of absorbing. In this cycle, however, the opposite is true: the number of new high-end homes planned is failing to keep pace with demand, according to Knight Frank in its ‘2023 Prime Predictions – Dubai Edition’ report.
Bulgari Lighthouse on Jumeirah Bay Island (31 apartments) and Alpago’s Palm Flower on the Palm Jumeirah (11 apartments) account for the lion’s share of new high-end homes coming to the city’s prime neighbourhoods, the firm said.
In mid-November 2022, Ellington said it would build an 88-unit project on the Palm Jumeirah.
Faisal Durrani, Partner & Head of Middle East Research, Knight Frank said, “Dubai’s prime residential market has – and continues to be – a global outlier, with record price growth in 2022, albeit this has been from a low base. Adding to the city’s appeal is its relative ‘affordability’, with prime homes transacting for around $800 per sq ft, making Dubai one of the most ‘affordable’ luxury residential markets in the world. Overall residential prices trail 2014 peak levels by 21.4%.”
Knight Frank said Dubai’s mainstream residential market is expected to register price increases of 5-7% by the end of 2022 and a similar rate of growth is expected in 2023.
“For prime Dubai, however, prices are likely to end the year around 50% higher than 2021. Supply is the other critical factor in our 2023 outlook, with just eight villas in Dubai’s prime precincts expected to be delivered by 2025,” he stated.
Later in November 2022, Arada entered the Dubai real estate market with the launch of Jouri Hills.
Across the 25 cities tracked, Knight Frank’s global research network now expects prime residential prices to rise by 2.0% on average in 2023, down from 2.7% predicted six months ago. Despite this slowdown, aggregate growth in 2023 would still be higher than that recorded in six of the last ten years.
Late in November 2022, Knight Frank also said that the demand for Grade A office space in key UAE markets was rising.
