Dubai pips Hong Kong as the world’s top city for super luxury homes over US$10 million: Knight Frank

Dubai overtook Hong Kong as the world’s top market for ultra-luxury homes in the first quarter as wealthy individuals flock to the Gulf’s financial hub, according to a report from Knight Frank on Wednesday.

The United Arab Emirate’s largest city recorded 88 transactions totalling US$1.66 billion for homes worth more than US$10 million in the first three months of the year. Hong Kong followed in second place with 67 deals worth US$988 million, followed by New York on 58 transactions totalling US$942 million.

London, a perennial favourite, slipped four places to sixth with 36 transactions.

“The latest figures point to the rise of Dubai as a critical part of the global super-prime landscape, as well as the centrality of New York, Los Angeles, London, Singapore, and Hong Kong for the world’s wealthy,” said Liam Bailey, the global head of research at Knight Frank

Dubai has grown as an attractive property destination for the wealthy since 2019. Its share of super-prime sales across 12 markets tracked by Knight Frank surged from 2 per cent in 2019 to 17 per cent in the 12 months to March.

While prices in Dubai’s prime residential areas surged 44.2 per cent in the 12 months to March, they declined 1.3 per cent in Hong Kong, Knight Frank said in another report last month.

Dubai’s booming housing market lures Asia’s rich, with prices set to tick higher

The Gulf city continues to draw Asia’s rich, with its property market registering robust growth. A report from Henley & Partners on Tuesday showed that 5,200 high-net-worth individuals with investible wealth of at least US$1 million flocked to the UAE last year, while 2,400 left Hong Kong.

The UAE and other countries that saw net inflows of high-net-worth individuals “host formal investment migration programmes and actively encourage foreign direct investment in return for residence rights,” the immigration specialist said.

“In Dubai, during the pandemic and subsequent years, a majority of investors sought out existing properties as a safer investment option,” Faraz Ahmed, a research associate at JLL MENA, said in a note in April.

Investing in homes worth over US$10 million “has retained its attraction for wealthy buyers despite huge economic headwinds”, said Knight Frank’s Bailey.

As sales grew 11 per cent to 417 deals in the first quarter compared with the previous quarter, Bailey said it showed “an ongoing desire” for such homes when “markets were clouded by peak uncertainty around global inflation and interest rates”.

Frances McDonald, director of residential research at Savills, put the decline in high-end London property sales down to rising prices.

“Buyers are not feeling the same urgency that they felt last year, and are happy to bide their time to find the right home and at the right price,” she said.

The border reopening early this year caused Hong Kong to rise to second place. The number of transactions in Hong Kong more than doubled to 67 in the first quarter from the previous three months.

“A notable uptick in mainland Chinese buyers” explained the surge, Knight Frank said.

With developers announcing more new residential projects, the real estate consultancy expects volumes to pick up in Hong Kong, after sales had been subdued because of Covid-19 restrictions and project delays.

Hong Kong’s luxury property will once again register on the radar of wealthy investors following the government’s launch of the Top Talent Pass Scheme to attract highly skilled individuals and incentives to attract the wealth-management offices of high-net-worth families, according to Ho-Pin Tung, director and head of private office at Knight Frank Hong Kong.

Additional reporting by Cheryl Arcibal