I’ve been writing and reading a lot lately about the luxury property market, especially right here in Dubai. What truly makes luxury properties luxurious is scarcity. Think of the fronds of the Palm Jumeirah – only a certain number of villas can be built there. News of a ten-bedroom Palm Jumeirah villa selling for a record $76 million in April rightly made the headlines.
Savvy investors are flocking to purchase luxury properties in Dubai, a trend that looks set to continue, especially as a way for HNWIs to hedge against rising international inflation. Bloomberg reports that the emirate saw the world’s biggest climb in prime property prices in 2021, a trend that looks set to continue not only this year but for many to come.
According to property firm Knight Frank, prime real-estate prices in Dubai rose 56% in 2021, beating price rises globally – which include increases of just 1.3% in London, 3.6% in New York, and 19% in San Francisco.
The luxury property sector accounts for around 15% of the local real estate market, with properties in this category valued at about 5-20 million dirhams. Still, there are certainly outliers going for figures like 99 million dirhams
While popular Western cities, such as New York and London, command property prices way north of 20 million, Dubai’s luxury sector offers a great deal more value for your investment in terms of fixtures, fittings, facilities, and space.
I’ve seen a rise in the branding of buildings and properties, adding an extra layer of luxurious flair. And, at the ultra-luxury end of the market, many people now want to literally move into a property – complete with not only fixtures and fittings, but everything from towels and bathrobes to crockery and cutlery.
Simply put, Dubai’s reputation is one of luxurious living. With a plethora of investment visas related to property, it has firmly become a safe haven for those escaping political regimes they disagree with and tax regimes they’d rather avoid.
I believe that a hard-earned reputation is now paying dividends. Buyers from Russia, Asia, and India, are looking to snap up luxury property in a market that is currently booming, and it’s a win-win situation for all parties.
H1 2022 saw Dubai property transaction levels – both villas and apartments – at their highest levels in over a decade. This buying ‘frenzy’ can be attributed to COVID-19, strong economic sentiment, and great confidence in the local property market.
Post-pandemic, many people are pursuing their investments, their dreams, and the chance to enjoy a change of life. As ever, Dubai holds great global appeal for investors keen to purchase in a safe economic environment, with regulation and tax breaks – and let’s not forget the luxury lifestyle we can all readily enjoy here.
We are seeing long-delayed projects now being revitalized, from Dubai Pearl at the entrance to the Palm Jumeirah to the Palm Jebel Ali.
Projects put on hold in the wake of the 2008/9 global financial crisis are now being dusted off and approached with renewed investment, as demand for luxury properties continues to outstrip Dubai.
The Dubai Pearl project – at the foot of the trunk of the Palm Jumeirah – is potentially being turned into an enormous resort that looks like the Moon.
Luxury is synonymous with our city, and with such projects – albeit only under discussion – there is a palpable sense of optimism in the market.
The new wave of billionaire investors – from cryptocurrency experts to Russian oligarchs searching for the latest luxury development in Dubai – is increasing demand and creating greater scarcity.
Dubai has always been a place where property is more spacious and more luxurious, and the current trends are towards increased luxury, more space, and more bespoke, designer touches. I believe we will see more branded residences, more curated homes, and more fanciful designs.
No surprise, then, that those much-beloved villas on the Palm Jumeirah saw the highest price rise in the year to June, and reports from some realtors that the average price per square foot for villa sales has increased by 28% this year, year-on-year.
With renewed investment in new developments from the government down, Dubai looks set to remain a global center of luxurious living and lifestyle, backed by a solid regulatory framework, a deep understanding of how to curate a lavish lifestyle, and a cultural, legal, and federal environment which continues to welcome people from all over the world.
