The world over, luxury home buyers are seeking out stable investment assets located at easily accessible locations for their jet-set lifestyles; one that can provide a competitive environment for their businesses whilst ensuring the safety and security for their families.
With its thriving real estate sector and growing economy, Dubai continues to attract such investor interest. According to Henley Global, 4,000 high-net-worth individuals are expected to relocate to the UAE in 2022.
Data from the Land Department demonstrates a stark difference when comparing Q2 2022 and Q2 2021, the market witnessed an increase in value by 61.56 percent with an increase in sales volume by 45.86 percent.
Such results are made possible not only due to an increasing ease of doing business but also thanks to continued reforms that are providing confidence to buyers that property investments in the Dubai are a safe option.
Encouraged by the UAE’s positive economic indicators, high-net-worth individuals are purchasing ready-to-move-in projects for their families, keen to settle down into the city as soon as possible.
The top three neighbourhoods for such luxury buyers in terms of sales volume were Palm Jumeirah (AED4.9bn), Downtown (AED4.8bn) and Business Bay (AED2.2bn) in
Q2 2022.
The stability of the housing market received a further boost recently with buyers having more information than ever before when it comes to open real estate data, a move by authorities to bring greater transparency to the sector.
Another law incentivises global real estate investment funds to invest in various property projects, further boosting the market’s attractiveness and providing the buyer and end-user more options.
Cataloguing and classification systems are also evolving, reducing risk of fraud, and delivering greater efficiencies. Land and property registration procedures have also been updated to encourage more activity. These measures are in turn encouraging developers to introduce projects in new parts of the city.
Capital appreciation continues equally in the more established areas. For example, waterfront areas remain to be considered very desirable by buyers moving into ultraluxury and exclusive neighbourhoods.
The biggest gainer in price in the secondary market in Q2 2022 was Jumeirah, a largely coastal neighbourhood, jumping an astonishing 225 percent from AED1,322 to AED 4,298. In the off-plan market, buyers were willing to pay significant amounts in Jumeira Bay, not just for villas and apartments but also land plots to make their own dream mansions.
In Q2 2022, Jumeira Bay Island also reached the highest average price in the prime apartment category, at AED24.5m, growing 23 percent over Q1. Despite the rise in property prices, Dubai is still very much a buyer-friendly market across price ranges particularly attracting the AED 5 – 10m home buyer.
With attractive mortgage rates, the opportunity is clear, the demand for ready homes is resulting in a precious supply of luxury houses, making the sector a good investment target.
Despite ongoing global geopolitical trends, we are seeing new off-plan projects and developments being registered, with some even being reimagined to cater towards the changing needs of the post-pandemic consumer.
Further to reforms, technology and infrastructure connectivity are also creating fresh opportunities for investors allowing those from all the world to remain close to the pulse of this thriving city but no longer as a transit destination but as a place to call home where they can live, work and play.
Chris Whitehead, Managing Partner at LUXHABITAT Sotheby’s International Realty