Dawn of the Roaring Twenties sees luxury home sales soar in Dubai
A record explosion in sales in the most expensive corners of the global real estate market could usher in a post-pandemic era of real estate exuberance – with Dubai among the first.
The West Asian business hub is the latest city to light up with what Knight Frank LLP has called “a dramatic post-Covid rebound in luxury home sales.” In the first five months of the year, 22 homes worth more than $ 10 million found buyers, the highest number since 2015 and up from a total of 19 last year.
Far from being an isolated hotspot, the emirate could mirror a pattern seen in other cities around the world, the consultancy said on Sunday. Homes in London’s wealthiest neighborhoods are selling at the fastest rate in seven years, according to data from LonRes.
“The rebound in Dubai’s super prime market echoes a larger global trend, possibly signaling the start of a ‘Roaring Twenties’ for global real estate,” said Faisal Durrani, head of research on the Middle -Orient at Knight Frank.
“The ultra-luxury segment of the market is a great barometer of overall market sentiment,” said Durrani. “Homebuyers are clearly overflowing with confidence in the emirate’s ultra-luxury luxury home market.”
Most of the deals for houses in the higher price bracket have taken place on the man-made island of Palm Jumeirah, with a total of around $ 770 million paid for properties on the order of $ 10 million between January and May, according to Knight Frank.
Economic activity in Dubai, especially tourism, has rebounded in the past six months as the emirate rolled out one of the fastest vaccination campaigns in the world and opened its doors to foreign visitors earlier than most other countries.
But even though luxury real estate appears to be thriving in Dubai, other parts of the emirate’s real estate industry are struggling. Public developers Limitless and Meydan are restructuring their debt, while one of the main real estate companies, Damac Properties, has sought to delist its shares after recording heavy losses. The founder of Damac postponed the effort this month when the regulator launched a review.
And Dubai’s multi-year real estate glut may also continue to put pressure on the value of high-end residential homes, Knight Frank warned recently.
Despite all the similarities between the major cities of the world, the differences are also telling. The British are leading the market in London’s wealthier neighborhoods, with UK buyers’ share currently standing at 62%, the highest in at least a decade, according to figures from Knight Frank.