Dubai’s high-end property sales up on demand from overseas

An industry report on Tuesday showed that house sales in Dubai worth $10 million or more rose 6% in the first quarter compared to last year, as demand from the international ultra-rich for homes in the emirate showed little sign of abating.

 

According to property consultancy Knight Frank, 105 homes worth $1.73 billion were sold from January to March, up from around $1.6 billion a year earlier.

Cash buyers dominated activity, with the palm tree-shaped artificial island of Palm Jumeirah being the most sought-after area. It accounted for 36.3% of sales by total value, followed by Jumeirah Bay Island and Dubai Hills Estate.

Home to the world’s tallest tower, Dubai in the UAE seeks to grow its economy through tourism, building a local financial center, and attracting foreign capital into property.

The recent property boom has shown signs of fizzling.

However, developers, investors, and brokers worry about whether a painful correction akin to the slump that rocked the emirate in 2008 can be avoided.

According to Knight Frank, Dubai ranked first globally for the number of home sales above $10 million last year, selling nearly 80% more such properties than second-placed London.

Knight Frank said in February that the city also bucked the trend of falling luxury prices in cities like London and New York last year, posting double-digit gains.

“The level of deal activity in Dubai continues to strengthen, particularly at the top end of the market, where the near constant stream of international high-net-worth individuals vying for the city’s most expensive homes persists,” said Faisal Durrani, Knight Frank’s head of research for the Middle East and Africa.

Durrani told Reuters Dubai was aided by the relative affordability of its luxury homes. Well-heeled buyers can purchase about 980 sq. feet of residential space for $1 million, “about three or four times more than you would get in most major global gateway cities.”

The strong demand suggests that many international investors are acquiring Dubai property for second homes rather than “constantly buying to flip,” he said, referring to the past practice of buying to sell to others quickly for more money. 

Source: Reuters