According to a recent report by Knight Frank, Dubai has dethroned Hong Kong as the leading market for ultra-luxury homes worldwide.
In the first quarter of this year, Dubai recorded an impressive 88 transactions valued at over $10 million, amounting to a staggering $1.66 billion. Hong Kong followed closely in second place with 67 deals worth $988 million, while New York secured the third position with 58 transactions totaling $942 million. These figures highlight the increasing allure of Dubai as a global hub for affluent individuals seeking high-end properties.
The Gulf city's real estate market continues to attract high-net-worth individuals, particularly from Asia. Henley & Partners' report highlighted that in 2022, 5,200 individuals with investible wealth of at least $1 million migrated to the United Arab Emirates, while 2,400 departed from Hong Kong. These net inflows of wealthy individuals can be attributed to the UAE's formal investment migration programs and its active encouragement of foreign direct investment in exchange for residence rights.
Faraz Ahmed, a research associate at JLL MENA, noted that during the pandemic and subsequent years, investors sought out existing properties in Dubai as a safer investment option. This trend contributed to the city's sustained appeal to affluent buyers.
Knight Frank's Bailey emphasized that investing in homes valued over $10 million retains its allure for wealthy buyers, even amidst economic uncertainties: "It has retained its attraction for wealthy buyers despite huge economic headwinds." The first quarter of this year witnessed an 11% growth in sales, reaching a total of 417 deals. This indicates a continued demand for ultra-luxury properties, demonstrating that high-net-worth individuals prioritize such investments despite concerns around global inflation and interest rates.
While Dubai claimed the top spot, London slipped four places to sixth in the ranking, with 36 transactions. Frances McDonald, director of residential research at Savills, attributed the decline in high-end London property sales to rising prices. She noted that buyers are adopting a more patient approach, waiting for the right property at the right price.
The resurgence of Hong Kong to second place was driven by a notable increase in transactions, which more than doubled in the first quarter compared to the previous three months. Knight Frank highlighted a significant uptick in mainland Chinese buyers as the driving force behind this surge.
Looking ahead, Knight Frank anticipates that Hong Kong's luxury property market will regain momentum as developers announce new residential projects and Covid-19 restrictions ease. Furthermore, government initiatives such as the Top Talent Pass Scheme, aimed at attracting highly skilled individuals, and incentives to draw the wealth-management offices of high-net-worth families, are expected to reignite interest in Hong Kong's real estate market.
In summary, Dubai's rise as the world's top market for ultra-luxury homes underscores its growing prominence in the global super-prime real estate sector. Meanwhile, Hong Kong's position reflects renewed interest from mainland Chinese buyers and government efforts to attract skilled individuals and wealth-management institutions. These market dynamics demonstrate the evolving landscape of luxury property investment worldwide. By fLEXI tEAM