Dubai Real Estate Sets A New Price Record

Dubai's luxury real estate market has been setting new records despite the ongoing COVID-19 pandemic.

Dubai's luxury real estate market has been setting new records despite the ongoing COVID-19 pandemic. The emirate has become a hub for the super-rich to store their assets, with apartments and townhouses in famous projects like Four Seasons, Bulgari, and Cavalli being snapped up.

This week, an individual spent a whopping 203.1 million dirhams, which is equivalent to more than $55.3 million, to buy a 5-bedroom apartment at the Baccarat project. What makes this purchase unique is that the project has not even broken ground yet.

Dubai Real Estate Sets A New Price Record

According to Luxhabitat Sotheby's International Realty, the transaction had the highest unit price per square foot ever recorded for an unfinished unit, with an amount of up to 14,000 dirhams/sqft or more than $41,000/m2. This transaction broke the previous record of 13,751 dirhams/sqft set in February 2022, when a five-bedroom apartment in the Bulgari Lighthouse was sold.

Dubai's luxury real estate market owes its boom to the super-rich getting richer amidst the pandemic and Russians pouring money in the region as a safe haven after the conflict with Ukraine broke out. In October 2021, luxury real estate prices in Dubai had increased by 89% compared to the same period in 2021. The recovery of the market was surprising, with villas in the Four Seasons Residences project that were purchased for about 40 million dirhams in 2021 now priced at approximately 100 million dirhams.

Data shows that the total value of luxury apartments sold in Dubai in 2022 has reached $6.8 billion, accounting for almost a fifth of the value of all apartment deals in the city. Real estate developers are also looking to collaborate with luxury brands as they can sell apartments for 30% more than conventional projects. Brands are usually paid a commission per transaction plus an annual management fee.

Savills' report released this week shows that Dubai has overtaken South Florida to become the region with the most luxury real estate in the world. The city currently has nearly 40 branded projects, with dozens of other projects announced and expected to be built from now to 2030.

Despite the ongoing pandemic, Dubai's luxury real estate market remains strong and continues to set new records. With the city's reputation as a hub for the super-rich and investors constantly pouring in, it will be interesting to see how the market evolves in the years to come.