Bright prospects ahead for Dubai’s luxury property market
The impressive performance of Dubai’s luxury property market in the first half of 2022 will likely continue for the rest of the year. That is the consensus among industry experts and analysts looking at the upper segment of Dubai’s real estate sector, with rising demand and surging prices as key contributing factors that will fuel its growth.
Staggering price tags
Between January and May this year, the top 10 villas in Dubai’s most premium areas sold for a staggering AED1.1 billion in total, according to data collected by Property Monitor. That number represents a small fraction of the estimated 483 transactions reported in the first quarter of this year. Imagine the stratospheric value of the real estate transactions for this period as a whole.
Meanwhile, data from the Dubai Land Department showed that the emirate’s real estate sector performance in Q1 was its highest since 2010.
A recent poll conducted by Reuters among top property market analysts in the UAE revealed that the robust performance of the luxury real estate market in Dubai is benefitting largely from a strong demand from foreign investors. This will continue for the rest of 2022 as an estimated 4,000 high net worth individuals (HNWIs) are expected to move to Dubai, according to Core, a real estate consultancy firm.
And because supply isn’t enough to meet rising demand, prices of premium property units are also expected to rise. This is not to undervalue the worth of luxury real estate properties, which are priced as they are because of their quality, location and the lifestyle associated with it. But prices will obviously be competitive given the current state of supply and demand.
With recent launches in the high-end market as well those in the pipeline, Dubai’s luxury real estate sector promises to be an oasis for real estate investors and end-users alike.
Among the projects that are currently creating a buzz in the market include DAMAC Lagoons, a premium property development that will turn 45 million square feet of land into a Mediterranean-inspired community with Luxury villas for sale in Dubai and Townhouse for sale in Dubai to be built around a stunning one million square feet of lagoons.
However, it is not just market dynamics that is driving Dubai’s luxury real estate sector on an upward trajectory. The emirate’s leadership has shown remarkable foresight in ensuring that the overall business environment is supportive of its real estate sector by introducing investor-friendly reforms and legislations, such as its Golden Visa programme and retirement package initiative. These will continue to attract strong interest from local, regional and international investors.
The introduction of the revised work schedule has also proved to be a boon for businesses, with many international companies looking to set up their regional base in the emirate as a result of this reform. Always at the forefront of innovation, Dubai is also making it attractive, and easy, for high profile digital nomads to relocate to the emirate, which will further fuel demand for high-end property units in the emirate.
What Dubai has done is offer potential investors and end-users an unrivalled value proposition and an opportunity to live and work in a safe and world-class, highly progressive society.
And while rising inflation rates across the world are impacting real estate market performance in key territories, it is unlikely that the same scenario will happen in Dubai, where prices of premium property will remain well ahead of inflation, according to Knight Frank’s Rising Inflation report.
With all these factors coming together, expect Dubai’s luxury real estate market to scale new heights in the second half of this year, affirming the emirate’s status a global hub for business and a safe haven for investments.
DAMAC is clearly one of leading developers in this space given its continuous development of high-end projects such as DAMAC Hills and DAMAC Hills 2, a great success that will continue in its growth.