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In Dubai, sales of homes valued at USD 10 million or more saw a 6% increase in the first quarter compared to the previous year, as indicated by a report from property consultancy Knight Frank. The demand from the international ultra-rich for homes in the emirate remains strong, with little indication of slowing down.
During the period from January to March, a total of 105 homes worth an overall USD 1.73 billion were sold, reflecting an uptick from approximately USD 1.6 billion recorded in the same period a year earlier. The market was primarily driven by cash buyers, with the palm tree-shaped artificial island Palm Jumeirah emerging as the most sought-after area, accounting for 36.3% of total sales by value, followed by Jumeirah Bay Island and Dubai Hills Estate.
Dubai, home to the world's tallest tower, has been actively seeking to bolster its economy through tourism, the establishment of a local financial centre, and attracting foreign capital, particularly into the property sector. Despite recent signs of a cooling property market, concerns persist among developers, investors, and brokers about the potential for a significant correction reminiscent of the downturn experienced in 2008.
Interestingly, according to Knight Frank, Dubai ranked first globally in terms of the number of home sales above USD 10 million last year, outperforming cities like London and New York by nearly 80%. Additionally, unlike many other major cities where luxury prices experienced a decline, Dubai posted double-digit gains in luxury property prices last year, as highlighted by Knight Frank in February.
Faisal Durrani, Knight Frank's head of research for the Middle East and Africa, noted the robust level of deal activity in Dubai, particularly in the high-end segment of the market. He attributed this to the continuous influx of international high-net-worth individuals seeking the city's most expensive homes. Durrani also emphasised the relative affordability of luxury homes in Dubai, where buyers can acquire around 980 square feet of residential space for USD 1 million, a significantly larger space compared to most major global gateway cities.
The sustained demand for luxury properties in Dubai suggests that many international investors view Dubai real estate as attractive for second homes rather than engaging in speculative buying for quick resale, as seen in the past.
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