Dubai cemented its status as the world’s busiest market for luxury homes with buyers pouring $1.59 billion into high end properties during the third quarter, according to Knight Frank LLP.

The number of sales for homes worth $10 million or more reached a record 277 in the first nine months of the year with $4.91 billion of transactions, putting the emirate firmly ahead of cities such as New York and Hong Kong, the property consultant said.

“Demand for luxury homes in Dubai remains resilient and supply continues to stubbornly lag demand,” said Faisal Durrani, head of Middle East research at Knight Frank. “The extraordinary run of price rises in this third market cycle has seen prices escalating for nine-consecutive quarters.”

Dubai’s property sector is booming as the government’s handling of the pandemic and its liberal visa policies attract more foreign buyers. The luxury end of the market — including waterfront villas on the city’s man-made palm-shaped islands — is benefitting from an influx of wealthy investors such as Russians seeking to shield their assets, crypto millionaires and rich Indians seeking second homes.

Still, Dubai has long been known for sharp booms and busts in the property market, with one of its most dramatic downturns coming in 2008, when a debt fueled real estate crash left some of its largest developers on the brink of bankruptcy. This time round, developers are attempting to hedge their bets more by demanding large down payments before they start to build, but wealthy home buyers are also taking on more risk by paying large amounts of cash upfront.

The city’s Palm Jumeirah was the most popular area for wealthy buyers, accounting for just over half of luxury sales, according to the report. Neighborhoods such as Emirates Hills and Jumeirah Bay Island were also popular and home prices in the three districts were 16% higher than a year ago, it said.

The more traditional district of Umm Suqeim 3 — in the shadow of the city’s famous sail-shaped Burj Al Arab hotel — was also in demand. Average prices there were 62% higher than its nearest competitor, Business Bay, Knight Frank said. Cash buyers dominated the activity and the pool of buyers was “exceptionally diverse,” it said.

The stock of prime properties is still restricted and demand for luxury beach-front homes is likely to continue for now, Knight Frank said.