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Demand Surge from the World’s Wealthiest Sets Dubai’s Luxury Real Estate Price on Fire

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[vc_row][vc_column][vc_column_text]”Rare Jumeirah Bay plot sells for almost double the price at AED 61 million” the August 2001 report from Luxhabitat Sotheby’s suggests that the high paced luxury property market in Dubai is on an exponentially upward trajectory. The city is witnessing an unprecedented rise in sales of high-end luxury real estate properties as the ultra-rich across the world set on a journey to find new homes in Dubai. Increasing demand is driving the prices higher for centrally located properties especially in the high-end luxury villas and apartment segments.

On the manmade marvel Palm, a Super-Penthouse, an epitome of luxury recently sold for AED 86 Million making it one the costliest penthouses ever sold in the metropolis. According to Alexander von Sayn-Wittgenstein, Managing Director of Luxhabitat Sotheby’s International Realty the penthouse prices would normally remain stable over time.

“The luxury segment is more stable than the mass market since supply here is limited and owners are wealthy and wouldn’t just sell for any given price,” he said.

[/vc_column_text][/vc_column][/vc_row][vc_row css=”.vc_custom_1636460379636{background-color: #f7f7f7 !important;}”][vc_column][vc_column_text]Dubai’s real estate market is witnessing continuous growth and increased investment, reports Dubai Land Department (DLD). As per the 18th edition of Mo’asher, Dubai’s official sales price index, launched by DLD, August 2021 scored the second-highest rank since December 2013 and best August in the last twelve months in terms of the number of monthly sales transactions with 5,780 sales amounting to a staggering AED 14.97 billion.

The August 21 sales took the yearly volume to 37,537 sales transactions worth AED 88.12 billion. The value of real estate sales transactions also rose by 22.61% in just eight months compared to 2020 which had 35,401 sales worth AED 71.87 billion. While secondary ready market sales contributed to 55% of total transactions, primary market sales stood at 45% registering a growth of 5% on a month on month basis and witnessing the highest amount of money infusion in the last 11 years.

The Arabian Ranches 3, Dubai Land, Dubai South, Tilal al Ghaf and Damac Hills 2 were the areas where villa sales took place in August while Business Bay, Jumeirah Village Circle, Dubai Harbour, Mohammed bin Rashid City and Downtown Dubai were the main areas of attractions for apartments.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]In 2021, Dubai real estate sector witnessed the best Q3 in its history in sales transaction value and the best Q3 ‬in sales volume since 2009.‬ In comparison to Q32020, Q32021 ‬showed an 85.36 % increase in sales transaction volume and an increase of 135.42 % in transaction value. Both the volume and value of sales transactions also rose considerably from that of precovid level and by 64.5 % and 138.8 % respectively.

Luxhabitat Sotheby’s, one of the famous global reality sector players, reported more than 8 million USD sales transactions by ultra-high net worth individuals since 2020. “The average value of the transaction has gone up in comparison to the last couple of years due to many UHNWIs moving to Dubai with a net worth of above $30 million,” Rohal Kohyar, Marketing Director at Luxhabitat Sotheby’s International Realty. Some big deals struck with clients who belong to Forbes’ billionaire list. As per Kohyar, a huge surge in demand helped them achieve an almost 300% jump in annual sales revenue.[/vc_column_text][/vc_column][/vc_row][vc_row css=”.vc_custom_1636460415460{background-color: #f7f7f7 !important;}”][vc_column][vc_column_text]Alluring sunshine, mesmerising skylines, attractive beaches, sprawling shopping malls, high-end dining facilities and a world-class healthcare system are some of Dubai’s tempting appeal to the growing number of millionaires moving to the emirate over the past several months. The ultra-rich retiring to Dubai are inspired and encouraged by the new visas, the handling of the pandemic and the quality of life.

The covid impact on traditional office work environments has also accelerated the trend in remote working from home further encouraging many international business persons to relocate their businesses to Dubai and take advantage of a relatively normal lifestyle. Dubai has scenic and mind-blowing beaches promising a sunny romantic waterfront lifestyle that attracts HNWIs from across Europe, Russia, and other cold countries to Dubai as their second home during cold winters.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Dubai has always remained friendly to foreign workers from across the world and only 10% of its population are UAE Nationals. This puts a global tag on Dubai and helps attract foreign nationals as tourists, businesses, and investment destinations.

Dubai is the gateway between the east and the west and due to its geographically central location, has made Dubai International Airport one of the busiest airports in the world. More than 15 million people visit this airport every year.

Around 2,000 high-net-worth individuals (HNWIs) relocated to Dubai from January to June 2021 and their population rose by 3.8% from 52,000 in December 2020, as reported by New World Wealth, a global wealth intelligence firm based in RSA and tracks the movements and spending habits of the world’s wealthiest people.[/vc_column_text][/vc_column][/vc_row][vc_row css=”.vc_custom_1636460426689{background-color: #f7f7f7 !important;}”][vc_column][vc_column_text]There has been an unprecedented rise in sales transactions in the luxury upscale residential space in Dubai surging 230% during Q12021, compared to Q12000. Prices have also increased in some top-end sought after locations and as much as 40%, highlighted Property Finder, the country’s largest real-estate website.

“Tons of people are coming in and buying multimillion-dollar properties on the spot, with no due diligence time whatsoever,” noted Matthew Cooke, a partner at consultancy Knight Frank, penthouse sales manager on man-made Palm Jumeirah artificial archipelago in Dubai.

Only a few prime locations are presently available in Dubai and high-end real estate developers are competing heavily for their future projects in the primary market. The secondary market doesn’t offer many options either as they are mostly owned by end-users. Presently a limited number of ultra-high-end real estate projects are on offer in the city and consequently carrying a hugely inflated price tag, 100% higher in some cases, on them. Effectively, the demand-supply gap is driving the luxury home prices higher in Dubai.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]As the ultra-high-end properties have seen the highest price surge during this year, it follows suit with the growing trend of UHNWI clients relocating to Dubai as their second home destination.

The residential prices in Dubai remained moderate over the last few years and have made the Dubai luxury real estate market amongst the most attractive and affordable in the region. The high-end residential property prices are still much lower compared to those in London, New York and Hong Kong. Being one of the safest cities in the world today, the luxury ultra-high-end real estate market in Dubai is expected to move further upwards in the coming days.[/vc_column_text][/vc_column][/vc_row]

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