The world’s wealthiest are poised to buy USD 4.4 bn worth of Dubai properties: High net worth individuals (HNWIs) are projected to acquire USD 4.4 bn worth of luxury residential real estate in Dubai in 2024, according to consultancy Knight Frank’s Destination Dubai report (pdf). More than 54% of those surveyed cited the city’s high-quality infrastructure as the number one factor making Dubai an attractive place to acquire real estate.

Who are these HNWIs? The report, conducted in partnership with YouGov, surveyed 317 HNWI — 217 living abroad and 100 GCC-based HNWI expats — with a collective net-worth of USD 5.4 bn.

The appetite for Dubai’s property is “exceptionally high,” the National quotes Faisal Durrani, partner at Knight Frank, as saying. “The level of interest to invest in Dubai rises with the level of personal wealth growing, from 28% for those worth USD 2-5mn, topping out at 70% among those worth more than USD 15 mn.”

Some 85% of GCC HNWI expats are buying residential property in Dubai as an investment, with nearly half intending to purchase the property as a buy-to-let investment. Additionally, 60% of East Asian HNWIs seek investment properties in Dubai for rental income, capital gains, or portfolio diversification. Meanwhile, only 31% of all surveyed HNWIs are looking to purchase a property in Dubai as a main residence, second home, or holiday retreat.

Branded property has been gaining traction: Some 69% of HNWIs are interested in buying branded residences in the emirate, up from 59% of surveyed investors in 2023. Demand increases from 41% for those with USD 2-5 m net worths to a staggering 94% interest for those with over USD 15 mn in net worth. Among global HNWIs, 83% are interested in purchasing branded residences in Dubai.

Behind the growing demand: 36% of the surveyed expect branded property prices in Dubai to climb by 5-10% within the first year of acquisition. 59% cited high yield and investment potential alongside service provision and physical amenities as the primary drivers for buying branded residences. Brand identity followed as the third factor with 58%.

GCC-based expat investors are taking a shine to healthcare properties, with 34% showing interest in purchasing property in the healthcare sector, while 76% of the surveyed plan to acquire residential real estate. Meanwhile 28% prefer branded residential properties.

With higher wealth comes a stronger diversification push: Knight Frank noted that preference for residential properties decreases with higher net worth. Wealthy investors with net worth ranging between USD 2-5 mn target investing in the residential sector, with interest for residences falling from 74% to 56% for those whose net worth exceeds USD 15 mn. “This apparent change in attitudes towards the residential sector amongst the world’s wealthy may not necessarily indicate a lack of appetite for residential real estate, but perhaps a greater desire to diversify their portfolios,” the report explains.

ABU DHABI AND RAS AL KHAIMAH-

Abu Dhabi is getting less interest from HNWIs, with only 33% of those surveyed saying they are interested in investing in the emirate, though the figure rises to 57% for those with more than USD 15 mn in personal wealth. Some 14% cited a perception of a lack of returns as their main reason for the lack of interest, while 11% cited lack of transparency and market data. Some 40% said their purchases would be for investment purposes.

It’s a similar story in Ras Al Khaimah, which is getting increased interest from HNWIs. Some 46% of those surveyed said the emirate’s transformation makes it more attractive, with interest rising to 75% of those with a net worth of over USD 20 mn.

LOOKING AHEAD-

The consultancy projects a 5% y-o-y growth in Dubai’s prime property prices in 2024, “positioning Dubai as the third fastest-growing prime residential market in the world behind Auckland 10% and Mumbai 5.5%. Prices in the mainstream market will grow at a slower 3.5%, according to the report.

HNWI’s forecast is also sunny: The surveyed HNWis are optimistic about Dubai’s real estate market, with 36% anticipating a 5-10% price increase within the first year of purchasing a property in the emirate. The most bullish are investors with over USD 15 mn in net worth, with 57% expecting prices to surge between 10-20% within a year.

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