Khaleejtimes: The iconic man-made island accounted for 30 per cent of Dubai’s real estate deals in the Dh20-million plus luxury property market segment in 2022, says a report

Palm Jumeirah is the top preferred target of ultra-high net worth individuals (UHNWIs) investing in Dubai’s uber-luxury property market, according to a study released by a luxury property consultancy.

The iconic man-made island accounted for 30 per cent of Dubai’s real estate deals in the Dh20-million plus luxury property market segment in 2022, according to Penhouse.ae, luxury property consultants.

In 2022, Dubai Hills added 20 per cent of the total transaction volume in the segment which saw a total of 826 super luxury properties sold for a combined value of Dh29 billion.

 
According to Petri Mannila, sales director of Penthouse.ae, interest in investing in Dubai’s luxury property market, mainly from HNWIs in Europe and the USA, is fuelling demand which is expected to grow by 20 per cent this year even as the price of opulent properties in Dubai continues to rise sharply.

The UAE, in particular Dubai, has become the destination of choice for millionaires from across the globe with 4,000 high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) estimated to have flown in last year. With the influx of the HNWIs population, Dubai’s luxury market has been booming in recent years despite the pandemic impact.

According to estimates, Dubai is already home to more than 67,000 millionaires, and this number is set to increase by 52 per cent in the next 10 years with the expected flow of more mega-rich migrate to the country. In the Middle East, Dubai ranked the top city for HNWI wealth, followed by Tel Aviv, according to the New World Wealth and Henley & Partners study.

"The number of HNWIs in the UAE is expected to rise from 163,000 in 2021 and reach more than 228,000 by 2026, reflecting a 39 per cent increase," according to a report by Consultancy Knight Frank.

A recent Property Market report revealed that apart from Palm Jumeirah, Business Bay, Downtown Dubai, Dubai Marina and Jumeirah Village Circle were the top preferred choices for those searching to own an apartment, while Arabian Ranches, Arabian Ranches 2, Arabian Ranches 3, Dubai Hills Estate and Palm Jumeirah were popular hits for investment or residence purposes in the villa category for 2022.

“I have never seen this much interest from HNWI interested in moving to Dubai to either live here or for business,” said Mannila.

“Demand for Dubai’s uber luxury residences has reached unprecedented levels as the political and economic situation in affluent western markets, Russia and Asia continues to be uncertain, encouraging wealthy individuals to turn to safe havens where they can protect and grow their investments.”

The most expensive villa sold in Dubai in 2022 was the Dh600 million villa on Palm Jumeirah while another villa on Dubai’s Billionaire’s Row was sold for Dh302.5 million. Penthouse.ae recently listed an uber-luxury villa on the Palm Jumeirah for Dh800 million. The biggest deal in its books last year was the Dh80.35 million sale of a unit at the Bulgari Residences.

“This is really a brand new segment in Dubai’s real estate market, given the fact that two years ago, such deals were only a handful, almost non-existent and yet today we are witnessing a market that this year may exceed Dh35 billion in transaction value,” said Mannila.

HNW investors are the main reason for the rapid increase of Dubai property prices, which is averaging 8.72 per cent across all segments according to the Dubai Land Department’s statistics, which also show that UHNW investors in prime districts of the city have doubled the average price of luxury apartments.

There is no bigger or better market for connoisseurs of luxurious lifestyles in the world other than here in Dubai. Over 75 per cent of the buyers are relocating permanently to Dubai as they deem the city as a safe and stable destination. Last year, the UAE attracted 4,000 millionaires and this trend will continue to strengthen, Mannila said.