Synonymous with luxury, the city of Dubai has long attracted high-net-worth investors to its real estate market. With some of the world’s most prestigious landmarks, from the magnificent man-made island of Palm Jumeirah to the world’s tallest building, the Burj Khalifa, today the city continues to grow in prestige and opulence. Combined with a low-tax environment and high-quality, cosmopolitan, and vibrant lifestyle, the city continues to attract people from all over the world.
While long popular among investors, the city has seen a growing number of HNWIs drive demand in the luxury real estate sector ever since post-pandemic recovery set in. On the one hand, pent-up demand drove sales, on the other, global geopolitical and macroeconomic conditions have boosted interest in Dubai real estate.
The most significant of these is the Ukraine-Russian war and its subsequent impact on energy prices and inflation. Dubai, cushioned in part from these effects by rising oil prices, continues to represent safe and smart real estate investment opportunities thanks to its economic resilience. And in fact, in contrast to competing global hubs such as New York or London, Dubai’s luxury real estate is around four times cheaper, reflecting significant value for money.
No wonder then that 54 percent of real estate professionals claimed that the pandemic increased demand for luxury homes across the city, and over two-thirds registered growth over the past 12 months. HNWIs from the world over, including India, China, the US, and several countries from across Europe including the UK, have been investing in Dubai’s real estate market in growing numbers, many of whom are looking to purchase a second home.
Overseas investors are responsible for the lion’s share of demand for luxury property in the city, though, of course, we are also seeing growing demand among residents. Thanks to recent visa reforms and changes to citizenship laws, many more residents are looking to make Dubai their home for the long term, driving investments in real estate.
Add to that the Dubai government’s ongoing efforts to transform the city into a global hub of entrepreneurship, startup technologies, and talent in general, and demand are only projected to continue its growth trajectory. This viewpoint is supported by local real estate professionals, 79 percent of whom believe that immigration will play a critical role in how the market develops over the next three to five years.
Against this backdrop, what are HNWIs looking for in terms of luxury real estate? Besides, of course, growing demand for outdoor space following the many months we spent pent up inside during the Covid-19 pandemic, we are seeing luxury connoisseurs who enjoy life’s finest pursuits search for bespoke spaces that cater to their taste for collectibles. From art to luxury fashion and automobiles, a dream home for the HNWI is not complete without tailor-made spaces designed to protect their most valuable assets.
Take artwork, for example. Super sensitive to UV exposure, LED lighting is critical to lighting up stunning artwork for enjoyment. Moreover, adjustable light fixtures are important too, so the artwork can be moved if so desired. More and more, however, many are looking for bespoke rooms for their collections requiring attention to detail when it comes to architectural design to ensure ample wall space.
Just as with artworks, bespoke spaces for luxury and vintage clothing and accessories are increasingly sought after among our real estate investors. Dry, airy spaces free of sunlight are a critical concern, particularly for jewellery and watch collections. And just as with artwork, it’s not just about their protection. Buyers are looking for spaces where they can enjoy, take in and peruse their collections.
And finally, let us not forget the perfect storage space for automobiles. To ensure cars and motorbikes are kept in their pristine condition, it is important to avoid concrete and ceramic flooring. Rather PVC or metallic epoxy are preferable as they are more durable, easier to clean and help prevent moisture build-up. Car lifts moreover can help increase inventory space if needed.
Whatever collectibles are in question – light, temperature, and humidity are all important things to consider when protecting cherished and valuable goods. But this also points to a broader trend. Real estate purchases in the luxury segment are increasingly about catering to specific tastes and lifestyles, with a hairpin focus on bespoke details that make a home truly one-of-a-kind. And unlike the oversubscribed real estate capitals of the world such as Toronto or Switzerland, say, Dubai has ample land to develop customised spaces uniquely tailored to their owner, for their every need.
As Dubai continues to evolve as a global hub for trade, finance, and tourism, the luxury real estate segment will evolve along with it, attracting more and more investors to its shores in the coming years.