One in Five Homes in Dubai Now Valued Over $1 Million, Report Finds
February 23, 2025
Dubai's real estate market has reached an extraordinary milestone, with nearly 20% of its residential properties now valued at over $1 million. A recent report from Knight Frank reveals that this is a dramatic rise from just 6.3% of homes holding this valuation in 2020. Driving this surge are sustained high demand and a limited supply of luxury properties. With 95,000 homes crossing the $1 million threshold, the total combined value of these properties now stands at a staggering Dh822 billion ($223.8 billion).
“Accidental Millionaires” and Market Dynamics
A fascinating trend highlighted in the report is the rise of “accidental millionaires” – homeowners whose properties have appreciated above $1 million purely due to market inflation. Dubai's real estate market is seeing unprecedented growth in transactions, with 121,978 home sales registered in the first nine months of 2024 alone, a 36% increase from the previous year. Luxury homes are at the forefront, with sales tripling over the past 18 months. This boom reflects not just growing interest in upscale properties but also the ripple effect of new government initiatives like long-term residency visas for investors and professionals.
Challenges Amidst a New Horizon
Despite the impressive growth, the market faces challenges. A shortage of villas and key development sites is expected to constrain supply, even as demand remains strong. Knight Frank projects 300,000 new homes will be delivered by 2029, but only 8,900 of these will be villas, keeping upward pressure on prices. Experts predict that while price growth will continue, the pace is likely to slow, with a forecasted 8% rise in 2025. As Dubai’s real estate market matures, it remains a beacon for global investors drawn to its blend of luxury, economic stability, and high returns.