In many ways, the world of luxury real estate is immune to slumps, demand trends and many of the other market forces that the rest of us face.
While home sales are currently at a 12-year low, transactions in which the home in question is worth more than $5 million was up 35.6% in the first eight months of 2022 compared to the previous year.
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When the price tag tops $10 million, the real estate veers into ultra-luxury -- certain cities, such as New York and London, are commonly associated with an ultra-expensive real estate market fueled by a high concentration of wealth and high earners.
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Here's Where You'll Find The World's Most Expensive Real Estate
According to the latest real estate consultancy firm Knight Frank data first reported by Bloomberg, 244 residential real estate sales worth more than $10 million took place in New York in 2022.
The city known as Billionaire's Row topped the list of the most transactions while Los Angeles was close behind with 225 sales. London was almost identical with LA's 223 while another contender, Dubai, came fifth with 219.
Other cities to make the list include Miami, Tokyo, and Saudi Arabia's Riyadh. Aspen's is also a top-performing market even if its small size makes it difficult to compare to major metropolises.
The home of Burj Al Arab and Palazzo Versace was, on the other hand, the city with the most sales in the very top range of the spending category -- 26 sales above $25 million were recorded in 2022.
And many of these price tags are being paid entirely in cash. While 40% of all real estate sales in Dubai were paid in full in 2021, by 2022 that number jumped to 80%.
"The growing concentration of wealth in the city has been catalyzed by the confluence of factors, ranging from the government's decisive response to the pandemic, to the roll-out of a range of new residency visa options," Faisal Durrani, who heads Middle Eastern research at Knight Frank, told Bloomberg.
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The consultancy firm also reported that the same price in Dubai secures four times more space than it does in dense cities like New York and London while tax benefits have been attracting hedge fund traders and other high-income individuals. Some of the most popular districts in the city include Palm Jumeirah, Emirates Hills and Jumeirah Bay Island.
While Dubai sales of homes in the highest price category rose by 44% last year, Knight Frank expects them to grow by another 13.5% in 2023.
Even though many cities with hot luxury markets are at risk of a later bubble, a report financial services firm UBS published last fall found that Dubai is at normal risk because average prices are still below a 2014 peak. The city's decades-old reputation as a billionaire's destination means that the high rate of sales is not a surge as much as a steady stream that's growing with time.
"It is this value that continues to drive UHNWI buyers into our market, most of whom are seeking a sun-sand-sea lifestyle that is now synonymous with Dubai," Andrew Cummings, who leads prime residential at Knight Frank told Bloomberg.
