Dubai recorded 86 residential transactions valued at $10 million or more during the third quarter this year, down 17 per cent annually, as wealthy investors continued to invest in the emirate, despite the impact of the Iran war.
Among the deals, 13 were for homes valued at more than $25 million, property consultancy Knight Frank said in its latest report on Wednesday.
Of the total, the 73 that were within the $10 million–$25 million bracket had a combined value of Dh3.93 billion ($1.07 billion), with the remaining 13 transactions generating Dh1.84 billion.
The highest-value transactions accounted for approximately 15 per cent of $10 million+ sales by number, but nearly 32 per cent of their total value.
“Despite the exceptional geopolitical backdrop across the region, Dubai’s luxury homes market has continued to record high volumes of sales during Q3 [the third quarter], albeit these are lower than this time last year," Faisal Durrani, partner and head of research, Mena at Knight Frank said.
Prices across the city’s 10 prime neighbourhoods have dipped for the first time since 2020, declining by 5 per cent between the second and third quarters, he said.
In total, prime transaction volumes are 29.4 per cent lower than this time last year.
“The biggest drag at the moment on overall market activity is the ongoing regional conflict. The somewhat ‘stop-start’ nature of the hostilities is predictably a confidence dampener," Mr Durrani said.
Wealth inflows
Dubai and Abu Dhabi continue to attract wealthy individuals on the back of government initiatives that support economic growth, including favourable tax environments, business-friendly policies and significant infrastructure investment.
Net wealth in the UAE is set to jump to $6 trillion by the end of this decade despite the short-term volatility caused by the Middle East conflict, a report this month by Boston Consulting Group found.
In the five years to the end of 2030, net wealth in the Emirates is set to increase by more than $2.3 trillion, at an annual growth rate of 10.6 per cent, the report said.
Dubai and Abu Dhabi have also been ranked among the top 10 destinations for next-generation wealth despite current war-related concerns, Savills said in a report this week.
Dubai was ranked eighth and the UAE capital was 10th among favoured cities for the $84 trillion of wealth expected to be transferred between generations over the next two decades, it said.
In the first nine months of the year, a total of 412 transactions of $10 million+ homes were recorded in Dubai, up 15 per cent on an annual basis, Knight Frank's latest report found. The combined value of the deals this year stood at about $6.67 billion, the report said.
On a quarterly basis, transaction volumes in the third quarter are down about 34 per cent from the previous period, the report said.
Palm Jumeirah tops list
In terms of areas in Dubai, Palm Jumeirah recorded the most number of $10 million+ residential sales in the third quarter, with 27 transactions worth Dh2.01 billion, Knight Frank found.
The community accounted for approximately 31 per cent of luxury homes sold between July and September and 35 per cent of their total value.
"The easing of prices by 9.1 per cent over the last 12-months means the island is increasingly offering ‘good value’ at Dh4,083 per square foot," said Louis Harding, partner and head of UAE residential at Knight Frank.
"Buyer interest here continues to largely stem from those seeking a permanent or holiday home, rather than buy-to-flip investors."
Jumeirah Second ranked second by transaction volume, followed by Emirates Hills, Dubai Hills Estate and Jumeirah Golf Estates.