Bucking a global downward trend in super-prime residential sales, Dubai again led the world ranking of quarterly deals in this category of residences priced above $10 million.
A super-prime intelligence report by global property consultant Knight Frank on home sales across 12 markets covered in the three months to September finds that along with Dubai, four other markets saw volumes rise through the last quarter on a year-on-year basis, beating the general decline in this sector.
In Q3, global super-prime residential sales fell 2.4 per cent on a year-on-year basis, with 362 sales across the 12 markets covered in the three months to September compared to 371 in the same period last year.
“Dubai once again leads the ranking of quarterly sales, a position it has held since Q4 2022. London follows in second position, with Hong Kong sitting in third place,” Knight Frank said in its study.
The super-prime market is driven more than most by new-build completions. “Strong sales volumes in 2021 were flattered to an extent by delayed completions in 2020. As we move into 2024, the tailwind from new build sales will weaken as the lower volume of new projects starts through the pandemic begins to be felt.”
The volume of super-prime homes sold in Dubai, priced at over $10 million, totalled $1.59 billion during Q3, according to Knight Frank’s finding.
PNC Menon, chairman of prime property developer Sobha Group, said the data is not surprising as Dubai remains one of the most sought-after destinations for the world’s super-rich, thanks to the city’s overarching appeal as a safe and splendid melting pot of diverse nationalities and cultures.
“The remarkable growth of Dubai’s property sector could be attributed to factors like economic stability, consistent innovation, infrastructure development, and a cosmopolitan lifestyle. The outlook for the city’s realty sector is very bright as Dubai will continue to witness a steady surge in population over the years,” said Menon.
“Demand for luxury homes in Dubai remains resilient and supply continues to stubbornly lag demand. The total number of $10 million home sales in Dubai for the first nine months of the year has hit 277, a record high with three months of the year still left to run. This builds on Dubai’s emergence as the world’s busiest $ 10 million+ sales market during H1, ranking ahead of New York (125), Hong Kong (109), and London (99),” said Faisal Durrani, partner–head of Research, Middle East & Africa.
“Super-prime activity has come off the 2021 peak, but our latest results confirm a market still seeing activity above pre-pandemic levels. Higher debt costs will continue to weigh on the sector – but a lack of fresh new-build project launches in key markets like London and New York will impact on sales in 2024,” said Liam Bailey, Knight Frank’s global head of research.
The report said residential sales in many of the world’s mainstream markets are down by 20 per cent to 30 per cent year-on-year. This weakness is mainly due to the surge in finance costs over the past year, which has had a dramatic impact on affordability and market accessibility. “While not immune from slowing activity, our latest data confirms that global super-prime markets have been more resilient, with sales in our 12 markets falling only 2.4 per cent in Q3 this year against the same period in 2022 – with 362 sales set again 371 respectively.”
Annualised data shows a similar picture with sales in the 12 months to September down by 4.1 per cent compared to the full-year 2022 results. The total value of super-prime sales – at $31.7 billion over the most recent 12-month period, has fallen from the 2021 post-pandemic high of $40.7 billion, but is still well ahead of the pre-pandemic total of $18.6 billion in 2019.
According to Knight Frank, the super-prime market is driven more than most by new-build completions. “Those strong sales volumes in 2021 were flattered to an extent by delayed completions from 2020, and to be fair some of the current strength in our global number, especially in London, New York, and Miami have been bolstered by completions in luxury schemes which started pre-pandemic.”
“As we move into 2024 the tailwind from new build sales will weaken as the lower volume of new project starts through the pandemic begins to be felt. Super-prime markets are inherently international and the recovery in travel volumes through 2023 have helped to support sales – with global flight volumes as one measure – closing in on 2019 levels again,” said the report.