Nearly One in Every Five Homes in Dubai Is Worth Over $1 Million, Says Report
Demand for residential properties in Dubai is surging, significantly increasing the number of homes valued at $1 million. According to a new report by Knight Frank, prices in Dubai have increased by nearly 20% from last year and are predicted to rise another 8% in the coming year. As a result, nearly 1 in every 5 homes in Dubai is now worth over $1 million, reflecting a dramatic shift in the city’s housing market.
Record Growth in the Number of Million-Dollar Homes
From 2020 to 2024, the share of homes worth over $1 million jumped from 6.3% to 18.1%. This rapid growth indicates a strong demand for higher-end properties. Knight Frank’s report highlights that of the 530,000 homes sold since 2002, 95,000 now exceed $1 million, collectively valued at $223.8 billion.
Price Inflation Leads to ‘Accidental Millionaires’
The report also identified “accidental millionaires”—owners of homes purchased for under $1 million that have since appreciated in value. This phenomenon, driven by price inflation, shows how Dubai’s property market continues to benefit investors even without active trading.
Record Sales and Robust Market Performance
Dubai’s residential market is experiencing continued expansion, with home sales transactions increasing by 41.8% annually. A record 47,269 homes were sold in the third quarter of 2024 alone. From January to September 2024, 121,978 home sales were recorded, surpassing last year’s total, marking a significant uptick in activity.
Demand for Luxury Properties Continues to Surge
Luxury homes in Dubai are particularly sought after, with sales tripling over the past 18 months. Almost one in five luxury homes listed between June and September sold during this period, showing the strength of the high-end market. This surge is partly driven by Dubai’s appeal to ultra-high-net-worth individuals, who are increasingly drawn to the city’s prime real estate.
Supply Struggles to Keep Up with Rising Demand
To meet growing demand, nearly 300,000 new homes are expected to be completed across Dubai by the end of 2029. However, a shortage of villas is expected to persist, with just 8,900 new villas scheduled for delivery by the end of 2024. The high demand coupled with limited land availability is driving up prices for both off-plan and secondary market homes.
Challenges and Future Market Outlook
Looking ahead, Dubai’s property market faces challenges such as a potential global economic slowdown and regional competition. However, experts forecast a more modest price growth of about 5% in the prime residential market in 2025. After five years of continuous growth, the rate of price increases is expected to slow, although demand remains strong.
Source: The National News
