Sales of homes in Dubai worth $10 million or more rose 6 per cent in the first quarter versus last year, an industry report showed on Tuesday, as demand from the international ultra-rich for homes in the emirate showed little sign of abating.
Activity was dominated by cash buyers, with palm tree-shaped artificial island Palm Jumeirah the most sought-after area, accounting for 36.3 per cent of sales by total value, followed by Jumeirah Bay Island and Dubai Hills Estate.
Home to the world’s tallest tower, the United Arab Emirates’ Dubai is seeking to grow its economy through tourism, building a local financial centre and by attracting foreign capital, including into property.
The recent property boom has shown signs of fizzling out, however, with developers, investors and brokers worrying whether a painful correction akin to the slump that rocked the emirate in 2008 can be avoided.
Last year, Dubai ranked first globally for number of home sales above $10 million, selling nearly 80 per cent more such properties than second-placed London, according to Knight Frank. The city also bucked the trend of falling luxury prices seen in cities like London and New York last year, posting double-digit gains, Knight Frank said in February.
“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 Middle East and Africa.
Durrani told Reuters Dubai was aided by the relative affordability of its luxury homes, where well-heeled buyers can purchase about 980 square 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 many international investors are acquiring Dubai property for second homes rather than “constant buying to flip”, he said, referring to the past practice of buying in order to sell to others quickly for more money.