Since 2020, Dubai’s luxury real estate market has enjoyed consistent growth, driven by a surge of ultra-high-net-worth investors seeking more than just a home in the sun. In 2024, this positive sentiment intensified, with sales volumes soaring by nearly 46% year-on-year and an impressive 47.7% month-on-month. As we enter the final quarter of what has been a prosperous and dynamic year in the real estate market, investors will be considering one key question: where is demand heading next?
Chris Whitehead, Managing Partner at Dubai Sotheby’s International Realty, shared his expert take on current demand trends, and what the next year may hold.
The Market has Pivoted Towards Branded Residences
One of the most notable trends in Dubai’s prime and super-prime property segments this year has been the rise of branded residences, which saw an impressive 44% surge in transaction volume during the first half of 2024.
Four Seasons Private Residences, DIFC
Chris commented: “This year, investors have shown even stronger interest in branded residences – particularly those still under construction. These homes can easily command premiums upward of 30% for roughly the same size and quality as their unbranded counterparts. One factor here is the trust and legacy behind some of these brand names – particularly historic brands like Baccarat, which rest quite literally on centuries of trust and heritage.”
Beyond the name, it’s very often the lifestyle that attracts busy ultra-high-net-worth individuals (UHNWIs) seeking the comforts of hotel-style living. “From 24/7 concierge services to more niche amenities like residents-only cigar lounges and high-end, these branded residences offer a five-star hotel living experience,” Chris added. “For busy investors who travel frequently, these amenities add immense value and convenience.”
Waldorf Astoria Residences, DIFC
Currently, some of the most coveted branded residences in Dubai are the Baccarat Residences, which is set to transform the Downtown skyline with two new crystal-inspired towers, and the Four Seasons Private Residences DIFC, One & Only, Eden House and the Four Seasons are also among the most valued branded residences as buyers lean toward more comfortable, serviced lifestyles.
Chris pointed out that the branded residences market is short in supply and high in demand, creating ripe market conditions for investors seeking real estate with high price appreciation and stable yields. “With a number of key projects still under construction, supply for ready apartments is low, which is only fuelling more demand. This creates an excellent opportunity for investors looking to diversify their portfolios with assets that are positioned for steady price growth,” he said.
Waterfront Homes are Also Surging in Demand
Dubai is home to some of the most unique coastal addresses in the world, from the fronds of Palm Jumeirah to the ultra-exclusive sandy shores of Jumeirah Bay Island. Demand in these areas remains strong as ever as investors seek waterfront addresses that are both idyllic and private.
“Waterfront homes naturally attract high demand in real estate markets globally, but what sets Dubai apart is the variety and uniqueness of the options available,” Chris explained. “Whether it’s a villa beside the world’s largest man-made lagoon in District One, a low-rise development along the Dubai Water Canal, or an exclusive residence on the seahorse-shaped Jumeirah Bay Island, these properties consistently capture buyer interest and boast strong resale values.”
How Does Dubai Compete on the Global Stage?
The luxury real estate market thrives on a steady influx of high and ultra-high-net-worth individuals, and 2024 has delivered on this front. Data shows that the UAE attracted the highest net number of millionaires this year, outpacing other major destinations like the US and Singapore. China and the UK on the contrary reported an ‘exodus’ of millionaires, strengthening Dubai’s positioning as an attractive global hub.
“Compared with more mature markets like London and Hong Kong, Dubai’s prime real estate market still offers exceptional value for money at approximately $850 per square foot, relative to $4,000 per square foot in Hong Kong. For investors, this translates into a higher quality of life, especially for family living.”
Beyond attractive investment opportunities, many high-net-worth families move to Dubai in search of a safe and secure living environment. In 2023, the World Economic Forum ranked the UAE as the second safest country in the world, owing to negligible crime rates, robust police infrastructure, and the country’s efficient handling of crises like the COVID-19 pandemic. Relative to other global cities, the emirate also has the appeal of simple visa processes, a stable economy and government, and highly favourable tax laws with no income tax.
Chris said: “These prices are excellent when considering the value and quality of the stock reaching the market. However, with demand continuing to outstrip supply, particularly in the top end of the market, we do expect prices to rise further. We’ve already seen a sharp 20% increase in the residential property price index (RPPI) during the first quarter of 2024 alone.”
What Can We Expect to See in the Next 6-12 Months?
Looking ahead, the Dubai prime real estate market is expected to maintain positive momentum as UHNWIs seek stable, safe investments – particularly amidst wider geopolitical uncertainty. The waterfront and branded residences segments are forecast to take lead here, owing to a shortage of ready supply and strong buyer interest.
Chris commented: “While a supply shortage of ready homes will continue to put pressure on prices, investors should anticipate price growth to stabilise at a more moderate pace throughout 2025, especially after the sharp increases we've seen in 2024. I expect that by this time next year, we’ll be talking about yet another strong year for Dubai prime and super-prime real estate.”
