UAE homeowners thrive: Rising property prices create accidental millionaires
Nearly one in five homes in Dubai sells for over $1 million, according to research conducted by international property company Knight Frank.
Tracking the price change of each home, Knight Frank determined what they call "accidental millionaires", i.e., homeowners who bought houses for less than $1 million that are worth more today just because of price increase. It has been counted only the homes that are unmarried.
‘In the 530,000 houses sold since 2002, 95,000 now have a value of more than $1 million and thus total Dh822 billion in sales’ Faisal Durrani, partner and head of research, Mena at Knight Frank.
"Real estate in excess of $1 million is up from 6.3 per cent of all sales in 2020 to 18.1 percent now," he said. That basically makes close to 1 in 5 homes in Dubai valued at more than $1 million.
According to Knight Frank’s calculation, all houses sold in Dubai since 2002 now worth Dh1.47 trillion, up 221 per cent since 2020.
8% jump in property prices in 2025
Property in Dubai prices are at an all-time high, thanks to demand from the new buyers and investors in recent years.
The property price of properties in Dubai will rise eight per cent by 2025, due to a no slowdown in demand, according to Knight Frank’s Dubai Residential Market Review: Special Edition.
House prices in Dubai are 19.9 percent more expensive now than the same period last year, according to the report released on Wednesday.
"After almost 5 years of increase, we see the growth in house prices slowing in 2025. And you also need to factor in downside market risks, which the most significant being that of global economic slowdown," added Faisal Durrani, partner and head of research, Mena at Knight Frank.
The report said Dubai’s luxury real estate market will see a less aggressive expansion of almost 5 per cent on top of the 44.4 per cent growth recorded in 2022 and the 16.3 per cent growth last year. A particular star player has been the luxury villa market with the waterfront or exclusive areas such as the Palm Jumeirah and Jumeirah Islands now almost twice the value of 2014.
2029 & 2040 forecast
The builders have been trying to catch up to the rising need for homes and the consultancy estimates that close to 300,000 apartments are slated for delivery in Dubai from now until late 2029.
Amounts expected: 80.1 per cent apartments; 17.4 per cent villas. Knight Frank projects that the villa scarcity will continue with only 8,900 new villas being built before the end of 2024 and another 19,700 – by the end of 2025.
It also ran three population growth models to calculate the relationship between supply and future predicted population growth:
In the 16 years until 2040, Knight Frank projects that Dubai will require 37,600-87,700 homes a year to fit between 5.8-8.6 million residents. This includes population growth of low and high rates.
If historical lags of up to 30 per cent of units per year continue, that will translate to 210,000 units finished in six years. That’s 35,000 homes a year over the next 6 years and is evidence that housing shortages are most likely to continue for a long time to come, even though the market is up and down and the price of homes could continue to rise.
"Low site supply in key areas of the city is also fuelling the prices of off-plan properties and secondary market inventory is also seeing strong price increases if older properties are renovated," added partner and head of prime residential UAE, Petri Mannila.
"The shortage in supply will be limited a bit to accommodate Dubai’s increasing population, but the fact that there are not many development sites and ready-to-buy homes available is going to keep creating an even bigger difference between the central districts of the city and other parts of Dubai," Mannila said.
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