Jumeirah Islands has ascended to prime-residential status, according to global property consultancy, Knight Frank’s second annual 2024 Destination Dubai report.
Knight Frank has surveyed 317 high-net-worth-individuals (HNWI) – 217 around the world and 100 GCC-based HNWI expats – to gain an understanding of their attitudes, appetite and aspirations when it comes to investing in real estate in Dubai.
Collectively, the HNWI respondents have a net worth of US$ 5.4bn and own 1,149 homes around the world between them.
Jumeirah Islands a prime neighbourhood
The Jumeirah Islands community includes 46 residential islands, each of which is a separate area housing 16 villas.
The total area of the community exceeds 300 hectares. Over 730 properties have been built on all the islands in total. Each villa has at least four bedrooms.
To qualify as prime, a neighbourhood must have 10% of all deals, by total value, take place at over AED 10m. This must be sustained for three consecutive years to demonstrate that an area is able to hold its value, says Knight Frank.
Jumeirah Islands joins the elite prime residential neighbourhoods of Emirates Hills, Jumeirah Bay Island and the Palm Jumeirah.
“As we saw throughout the pandemic, the ‘race for space’ underpinned the performance of villa prices in Dubai, which jumped by 17% over the last 12 months and the same has been true for Jumeirah Islands. The other factor contributing to its ascension to the prime club has been the unending surge in demand from international buyers for either waterfront homes, or those that offer access to parks and/or green spaces – and Jumeirah Islands provides both.
“The number of homes available for sale in Jumeirah Islands has declined by 28% over the last 12 months to 279 homes, adding to the 44% fall in prime home listings in the city to around 4,900 properties”.
Faisal Durrani, Partner – Head of Research, MENA
Buyers not only continue to pay record prices for homes in Jumeirah Islands, but are spending similar amounts on refurbishing them. This pointed to a longer-term buy-to-hold or buy-to-live mentality that has defined the market for the last four years, according to Knight Frank.
The most expensive home to sell in the man-made inland island cluster was a four bedroom 5,500 sq ft home. It traded for AED 28m (AED 5,111 per sq ft) in late December 2023. The last 12-months has seen 97 homes change hands here, worth approximately AED 1bn.
Meanwhile, average prices in Jumeirah Islands have risen by 5.9% during Q1 2024 and by 67.5% over the last 12-months.
Global UHNWI focussed on villas
Knight Frank’s survey revealed a clear desire from the world’s wealthy to own a villa in Dubai. However apartments still remain very popular too.
“We have been carefully monitoring the status of several prime-areas-in-waiting and Jumeirah Islands now makes the cut, reflecting its popularity as one of New Dubai’s long-established neighbourhoods.
“The aspiration to buy a villa in Dubai rises with levels of net worth, growing from 30% or those with a net worth of US$ 2-5 million to 48% for those with personal wealth levels of over US$ 15 million. This figure climbs further still to 59% amongst our global HNWI respondents with a net worth of over US$ 20 million.
“While the startling growth rates for Dubai’s prime residential market are phenomenal, it doesn’t take away from the face that Dubai’s luxury homes market still remains one of the most affordable in the world”.
Shehzad Jamal, Partner – Strategy & Consultancy, MEA
Impact on Dubai’s prime market
With Jumeirah Islands joining the league of prime neighbourhoods in Dubai, Knight Frank says the impact has been minimal, with this exclusive segment of the market still one of the best performing in the world.
In fact, after growing by 16.3% in 2023, following an extraordinary 44.4% increase during 2022, Dubai’s prime residential market has grown by 18.2% in the 12-months to the end of Q1 2024.
Indeed, US$ 1m secures some 980 sq ft of residential space in Dubai, compared to just 366 sq ft in New York, 355 sq ft in London, or 172 sq ft in Monaco.
Furthermore, average transacted prime prices as at the end of Q1 2024 stood at AED 3,754 per sq ft in Dubai, or around US$ 1,023 per sq ft.
“Dubai is no longer an emerging market, but one that has emerged. The growing list of prime residential neighbourhoods is yet another sign of maturity bedding in and its only a matter of time before other areas such as Tilal Al Ghaf, Jumeirah Golf Estates, Al Barari and/or Blue Waters also make the transition to prime status.”
Will McKintosh, Regional Partner and Head of Residential, MENA
The elevation of Jumeirah Islands comes as the real estate market in the UAE is expected to undergo significant growth and dynamic changes in 2024.
