Dubai Was The Leader In Ultra Luxury Home Sales In 2023
According to data released from Knight Frank, global super-prime ($10m+) residential sales increased 11% year-on-year during Q4 2023 with 411 sales recorded across 12 markets versus 370 sales reported during this same timeframe in 2022.
The rebound in super-prime sales activity reverses a slowdown seen during the previous quarter and indicates an optimistic global economic outlook at the end of 2023, as expectations for interest rate cuts in 2024 became stronger.
Dubai was the leading market in Q4 2018, with 108 sales, followed by London (54 sales) and New York (52 each). Hong Kong dropped out of the top five markets for the first time, dropping its sales volume to 15 sales; Sydney and Geneva demonstrated significant activity throughout this quarter, ranking fourth and fifth respectively.
Although super-prime sales in 2023 saw an uptick, pushing total sales past 2022’s levels by 22%, they still far exceeded pre-pandemic levels seen in 2019.
Wealth Report 2024 notes that global wealth creation made a notable positive turn in 2023 with a 4.2% increase in UHNWI population worldwide. This growth was spurred by changing interest rate expectations as well as strong equity market recovery in the US economy and globally. Annualized $10m+ sales have continued their upward trajectory over recent quarters despite rising interest rates that negatively impacted global housing markets.
2023 sales totalled 1,782, up 1% year-on-year compared to full year 2022 but 22% below peak levels of 2,291 during full year 2021. Superprime sales reached $31.9 billion year end December, down 22% year on year from its $40.7 billion peak during pandemic property boom years but significantly higher than pre-pandemic levels seen in 2019.
Liam Bailey, Knight Frank’s Global Head of Research says 2023 was an important year for global super-prime markets; while rates continued their upward march during the first half, wealth creation rebounded as asset prices surged as part of an AI-fuelled equity boom and later supported by expectations of lower rates in the fourth quarter. 2024 will likely mark an eventual shift toward lower debt costs that will stimulate activity across key global super-prime markets.”
Local Luxury Property Market Activity for 2023.
Dubai’s market remains strong with sales volumes in the super-prime segment. Over the past two years, luxury prices have seen significant price growth of 100%+ and many properties from prime to super-prime have shifted into this segment as demand grows beyond waterfront properties and into inland villas confirming an expansion of demand in Dubai’s market.
London remains in second place for our list, tied with New York despite facing economic turmoil. Following the “mini-budget” fiscal event that caused lending markets to constrict further, superprime sales began faltering significantly at the beginning of 2023 resulting in more difficult sales conditions than before.
Geneva’s strong performance mirrors an uptick in Switzerland’s wealth landscape. According to Knight Frank’s Wealth Report 2024, Switzerland saw its UHNWI population grow by 5.2% year-on-year – fifth strongest globally and highest among Europe.
Australian luxury real estate market is showing strong signs of strength due to improved buyer sentiment and interest rate changes, and wealth creation. A notable increase in cash transactions has contributed to this market surge; currently representing over half of prime property sales in Sydney alone.
New York experienced an increase in sales volumes during Q4, in part thanks to the launch of luxury developments that demonstrated confidence in their market. Conversely, Miami was plagued with an insufficient selection of super-prime properties due to high buyer demand; Los Angeles still saw relatively healthy volumes despite some uncertainty among potential buyers due to state mansion taxes.
Singapore’s super-prime market continues to struggle under more stringent purchase taxes that increase by 60 per cent for foreign buyers. Hong Kong saw weak Q4 performance in both super-prime and wider residential sales markets – prompting authorities to make significant adjustments to property tax in February this year.