Dubai made history in 2023 by becoming the world’s leading luxury property market, generating close to $850 million (AED3.1 billion) from high-end residential units costing upwards of $10 million in the first six months of the year, and topping London, New York and Paris for the first time, the latest market report revealed.
The market saw 176 high-end property sales that exceeded $10 million during the January-June period, including some of the headline-grabbing deals such as a whopping $111.6 million (AED410 million) deal for a penthouse in the Bulgari Lighthouse residence on Jumeirah Bay Island.
The increased global focus on Dubai has also led to a boom in the off-plan sales market, raising its share to about 50 percent of all property sales, in the first half of 2023, the Allsopp & Allsopp H1 2023 market report said.
The surge in demand has also led to residential property sales prices across Dubai seeing a 17 percent average growth – and far more across the luxury end of the market, said the report by Allsopp & Allsopp, billed as the largest independent real estate agency in the city.
“Even my crystal ball did not foresee the sale of an AED410 million penthouse coming, as Dubai became the leading global luxury real estate market in the world for homes sold upwards of $10 million [in H1, 2023], Lewis Allsopp, CEO of Allsopp & Allsopp, told Arabian Business.
“We saw an average of four potential buyers competing for each listed property, driving the average sales price up to AED3.6 million – up by close to 10 percent – in the past six months,” he said.
Record-breaking sales in H1 2023
The first six months of 2023 saw the Dubai property market performing at record levels, with sales totalling $48.46 billion (AED178 billion), a sharp rise of 55.4 from H1 2022, Allsopp & Allsopp said.
The report said in H1 2023, Allsopp & Allsopp’s new buyer registrations soared over 84 percent compared to the same year-ago period.
The agency also saw its platform generating 49 percent more property viewings than the previous six months, and converting into 28 percent more sales over the same period.
“As a company, we recorded 57 percent of new buyers taking advantage of mortgage finance, contrary to the widespread narrative that Dubai operates within a cash-buyer bubble,” Allsopp & Allsopp said.
“These data points also show a far healthier end-user market than the headlines will have you believe,” it said.
Everyone’s eyes are on Dubai
The Allsopp top executive said overseas investors have been drawn to Dubai, initially eager to experience the lifestyle, and once here, have been seduced into investing in its future.
The current financial – and also the cultural instability – being witnessed across Europe, the US, and many significant markets also added to surging investor preference for Dubai, he added.
The report said while the luxury branded launches and mega-villa sales grabbed headlines in the first half, the rest of the market also put up a decent performance in terms of sales and price rise.
“This segment saw about 78 percent of all sales transactions under AED3 million, with 74 percent of all sales being apartments,” it said.
This segment, however, saw only a modest price growth – 4-8 percent – reflecting a maturing and stable real estate market in the city, the report said.
2023 first half breaks several records
The Allsopp & Allsopp report said the first six months of 2023 saw the Dubai property market performing at record levels, clocking as many as 61,166 total sales transactions, up by 42.3 percent from the previous year.
“We continue to see an even split between off-plan (50.1 percent) and secondary (49.9 percent) sales transactions. However, secondary sales contributed a larger slice (60 percent) of the total sales in value terms, helped by prices of readily available properties increasing at an average rate of 17 percent during the first six months of the year,” the report said.
Apartment sales accounted for 74 percent of all Dubai property transactions.
“In the first six months of the year, premium units with water views in Downtown Dubai, Bluewaters, and Dubai Marina experienced significant price increases – 8-10 percent – as we saw increased demand for these units coming from Russian investors and recently returning Chinese buyers,” Allsopp & Allsopp said.
British and Indian investors in the same segment, however, opted for more affordable apartments in areas such as JLT, JVC and Business Bay.
“Our company has experienced its busiest year yet in 2023, with our teams shattering many long-standing company records and personal bests, with contributions from individual agents and company teams helping us complete more sales and lettings transactions for our clients than ever before,” the premier real estate agency said.