Study: Rich people to spend $4.4 billion on luxury Dubai homes

27 May 2024 Consultancy-me.com 3 min. read
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Rich people, or so-called high-net-worth-individuals (HNWI), will in the coming years spend hundreds of millions of dollars on buying new luxury homes in the United Arab Emirates, according to Knight Frank research.

The global property consultancy surveyed over 300 HNWIs – 217 around the world and 100 GCC-based HNWI expats – to gain an understanding of their appetite and preferences when it comes to investing in UAE real estate. Collectively, the HNWIs surveyed have a net worth of $5.4 billion.

The findings show that Dubai is the most preferred emirate in the UAE for residential real estate deals, with spending appetite estimated by Knight Frank to amount to $4.4 billion.

Where will HNWIs buy luxury homes in the UAE?

“Dubai remains the number one destination for the global HNWI community. Not only has the city cemented its status as the busiest $10+ million home sales market in the world, but HNWI’s continue to clamour for the ‘Dubai life’ and property at the upper echelons of the price spectrum in the emirate is a hotly contested commodity,” said Faisal Durrani, Partner and Head of Research at Knight Frank.

“This is best evidenced by the fact that the desire to own a home in the city jumps from 28% for those with a net-worth of $2-5 million to 78% for those with a net-worth in excess of $15 million.”

“What is truly extraordinary however is the average budget for ultra-high-net-worth-individuals considering a Dubai property purchase. 25% are prepared to spend between $60-80 million on a home in the city, while a further 16% would like to spend over $80 million. Meanwhile the average budget for this exclusive cohort stands at $58.5 million,” Durrani continued.

The budget of HNWIs for home purchases in Dubai

The city’s high-quality infrastructure ranks as the number one factor that makes Dubai an attractive place to acquire real estate, according to the HNWIs. Indeed, the UAE’s infrastructure quality was ranked fourth globally in the World Economic Forum’s latest Competitiveness Report published this January.

Dubai’s position as a global tourist destination is the second biggest consideration to HNWI. The emirate has experienced a meteoric rise from being a small fishing village in the early 1800’s to the world’s third most visited city, with 17.1 million arrivals in 2023 (behind London at 18.8 million visitors and Istanbul at 20.2 million tourists).

Around 4 of 10 HNWIs said that Dubai’s ease of purchase and better value for money are key factors that make the emirate attractive for luxury home ownership.

Where in Dubai?

When asked what factors would determine where they settle within Dubai, the wealthy respondents mostly mentioned location.

Where to buy a luxury home in Dubai

“Access to green space, or parks has emerged as the number one consideration for HNWI eyeing up a property purchase in Dubai. 88% of HNWI’s have named this as a potential deal breaker when weighing up property options in the city,” said Shehzad Jamal, Partner at Knight Frank.

“The growing global focus on personal well-being is also exemplified in the desire for HNWI to be located within close proximity to a clinic, or hospital, which has emerged as the second most important property selection criterion. Similarly, access to the beach has been cited as the third biggest selection criteria. This is perhaps unsurprising given that Dubai is synonymous with beach-front living.”