According to the Financial Express, Dubai continues to remain one of the world’s most ‘affordable’ luxury residential markets, with most prime residences transacting for an average $870/sq. ft. USD.
The ‘affordable’ price per square foot in most prime residential neighbourhoods—combined with Dubai’s safety, excellent climate, and unrivalled sun-sea-sand lifestyle—is helping the city cement its iconic status in the luxury property market, thus fuelling the demand.
How Dubai Is Considered an ‘Affordable’ Luxury Home Destination
According to the Dubai Residential Market Review Winter 2022-23, a report published by Knight Frank, the majority of submarkets in Dubai exhibit a house-price-to-income ratio of less than six times yearly income.
Whereas, as a rule of thumb, a house is considered affordable when its price is around six times the gross income of a household.
The quarterly report, which analyses Dubai’s real estate market and sheds light on key trends and forecasts, also published average house prices vs. average annual income by neighbourhood to help readers understand how accessible the mainstream residential market is.
Based on this report and other factors, the Financial Express has determined that the majority of Dubai real estate is relatively affordable.
The only outliers are three exclusive areas—Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island—with house prices costing more than 20 times the average yearly income.
What’s Driving Demand for Dubai’s Luxury Homes?
Dubai’s luxury home sale boom continues as millionaires flock to the Emirates in search of second addresses in the city’s most exclusive enclaves.
“The meteoric rise of Dubai’s multi-million-dollar homes market over the course of the last two years has been phenomenal. The performance at the top of the market clearly demonstrates the arrival of Dubai as a luxury hub to rival long-established markets elsewhere, with no sign to suggest a slowdown in the seemingly relentless demand from global ultra-high-net-worth-individuals zeroing in on the emirate in search of second homes,” explained Faisal Durrani, Partner, the Head of Middle East Research at Knight Frank.
A study by Henley & Partners predicted that 2023 would see a massive influx of elites and millionaires settling down in the Emirates, with more and more countries now easing travel and quarantine restrictions.
Case in point: The number of millionaires migrating to the UAE in 2022 was over 4000, which was more than the number of millionaires settling down in the UK, the USA, Australia, Switzerland, etc.
The result: 219 sales of homes worth over $10 million were recorded in 2022, compared to 93 in 2021—a jump of a staggering 135%.
High-net-worth individuals and the richest international buyers are vying for luxury properties in the three neighbourhoods of Dubai, despite the soaring prices.
However, the demand for properties has slumped in other cities.
Despite a surge of 49.4% in property price in 2022, Palm Jumeirah remains Dubai’s star performer, making record-high sales of villas and luxury apartments.
Palm’s world-class amenities, private beach access, glittering waterfront views, and tranquil settings has made it top the ultra-high-net-worth customers’ list.
Luxury Interior Design in Dubai
With contemporary designs dominating the Dubai luxury market now, high-end interior design studios are introducing new design styles and ideas to transform exclusive spaces into exquisite residences.
Bringing out the best of both worlds—interior design and architecture—a class-leading interior design studio like Accouter aims to embody the true spirit of design excellence.
Despite all the challenges posed by global inflation and the shortage of new supply compared to demand, Dubai’s luxury residential market remains affordable and buoyant, showing no signs of slowing down.