’The Wealth Report City Series – Dubai Edition’ Unveiled

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To coincide with the launch of the 2018 Knight Frank Wealth Report, which provides the global perspective on prime property and wealth, Knight Frank has released the second of its Wealth Report City Series – The Dubai Edition. Launched from the future site of The Royal Atlantis Residences, Dubai’s first ‘super-prime’ development, the Wealth Report City Series – Dubai Edition provides a comprehensive overview of economic, property market and lifestyle trends in the city.

Key findings:

  • Number of Ultra-High-Net-Worth Individuals (UHNWIs) living in Dubai expected to increase by 60% in the 10 years leading up to 2026[1]
  • Population growth and strengthened economy signal renaissance for Dubai’s prime property market
  • Prime property in Dubai holds relative affordability in global market
  • Investment in infrastructure significantly boosting quality of life ratings

Prime Property Market on the Rise

The report highlights that prime property in Dubai is experiencing renewed demand with the market poised to enter a new pricing cycle. Despite recent price falls, recovery in prime residential markets is now being spurred by a strengthened economy and growing population.

Transactions on prime residential property are up in Q2 (6.6%) and Q3 2017 (5.7%), the first consecutive annual increase since Q2 2013.
These assets are holding their value with prime property prices rising by 6.1% in the five-year period leading up to Q4 2017, which sits in line with other key global Cities such as London (6.3%) and Hong Kong (6.2%).

Developers are responding to the strengthening prime property market by creating bar-raising residential developments to meet this increased demand. The Royal Atlantis Residences, a 43-storey development, will offer Dubai’s first ‘super-prime’ residences upon completion in late 2019.

A New Renaissance for Dubai

Dubai’s population has risen 76% in the decade to 2016, with an additional 15% increase predicted by 2026. With over 90% of the population born outside the emirate, this increase is testament to the city’s ever-growing appeal to a global audience. As a gateway city, positioned as a hub from which to easily access future economic growth centres in Asia, the Middle East and Africa, Dubai is particularly attractive to those with an interest in financial and business sectors:

Employment in financial and business sectors rose by 220% in the decade to 2016.
Overall employment growth for the decade leading up to 2016 was 66%.
In 2017, The Dubai International Financial Centre (DIFC) was ranked as a top 10 global financial centre for the first time.[2]

Accelerated economic growth for 2018 is predicted within the context of Vision 2021, a comprehensive framework to position Dubai as one of the best places to live and work in the world. With the GDP forecast to increase by 3.3% in 2018, Dubai’s strong economic performance is a key driver for the re-emerging success of prime residential markets. While robust growth is expected for the financial and business sectors in Dubai, this expansion is expected to be outpaced by other sectors, most noticeably information technology.

“Arguably, no city has seen such a rapid transformation as Dubai,” said Liam Bailey, Global Head of Research, Knight Frank. “The speed of growth and expansion has brought more volatile property market cycles than in other more established cities, but every cycle helps create a more mature investment environment. The opportunities arising from this growth are significant, a rapid growth in population has opened up investment prospects across residential, industrial, retail, office and leisure.”

Affordability Among Global Markets

Despite a steady long-term increase in prime property values in line with key global hub cities such as London, Hong Kong and New York, Dubai remains relatively affordable in a global context.

Analysis across the world’s markets in 2017 shows that $1million will purchase 138 square metres of prime residential property in Dubai, compared with 16 square metres in Monaco, 22 in Hong Kong, 25 in New York and 28 square metres in London.

Dubai’s appeal is further bolstered by current exchange rates, with investors benefitting from the weakening Emirati dirham, which recorded declines of 6.8% in the year to date 2017.

According to the report, Dubai’s relative affordability is supported by the emirate’s status as an income and capital tax-free system, encouraging buyers from an increasingly diverse range of countries.

Destination for Ultra-High-Net-Worth Individuals

Dubai’s status as a home to the globe’s UHNWIs is predicted to be further cemented in the next decade.

Currently ranked as the 25th largest city by number of UHNWIs, this demographic is expected to grow by a further 60% in the 10 years to 2026.
Dubai experienced an increase in UHNWIs of 12% from 2015 to 2016, outpacing other financial hubs including New York, London, Hong Kong, Singapore and Tokyo.

In addition to its economic and geographic appeal, Dubai offers a desirable lifestyle and is ranked top in the Middle East for quality of life[3]. As a truly global community, Dubai’s identity as a world-class city is being strengthened by the upcoming World Expo 2020, which will make the city the first destination in the Middle East to be honored with this accolade of hosting a World Expo. This has heralded significant investment in infrastructure, with more walkable neighbourhoods created and plans for an expansion to its public transport systems are currently underway.

“Dubai is currently setting the tone for a global renaissance in luxury residential living,” said Maria Morris, Partner and Head of MENA Residential – ‎Knight Frank Middle East. “The Royal Atlantis Residences will be the very first ‘super-prime’ project of its kind in Dubai – designed specifically to cater to the high-net-worth global citizen with stunning architecture, unique detailing and experiential offerings available nowhere else.”

The Royal Atlantis Residences, available exclusively through Knight Frank, are ideally positioned to answer renewed demand for prime property in the Dubai marketplace. The 231 homes will benefit from direct access to facilities of the neighbouring Atlantis, the Palm and will offer over 90 swimming pools, world-class amenities and prime access to Dubai’s growing range of cultural experiences. Residences at The Royal Atlantis start from AED 6,995,000 (approximately $1.9m/£1.4m/RM7.5m).

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