19 March 2023, Khaleej Times
Ultra-luxury property has witnessed unprecedented demand, with the likes of Indian billionaire Ambani buying most expensive property ever for Dh600 million.
Prime property prices in Dubai are cheaper by 20 to 80 per cent when compared to major cities such as Monaco, Hong Kong, New York, London, Geneva, Paris, Beijing, Tokyo etc. despite a massive increase in rates during the post-pandemic period.
According to Knight Frank’s The Wealth Report, $1 million (Dh3.67 million) can fetch 105 square metres in Dubai as compared to 17 sqm in Monaco, 21 sqm in Hong Kong, 33 sqm in New York, 34 sqm in London, 43 sqm in Paris, 60 sqm in Tokyo and 87 sqm in Melbourne.
Prime properties in Madrid, Mumbai, Cape Town and Sao Paulo are cheaper than the emirate in a list of 20 cities.
These attractive prices have driven a massive influx of foreign investment into the emirate’s luxury property segment since 2020, thanks to the successful handling of the pandemic and the introduction of new long-term visas boosting demand from foreign investors.
The ultra-luxury property asset rates have witnessed unprecedented demand in the post-pandemic period with the likes of Indian billionaire Mukesh Ambani buying the most expensive property ever for Dh600 million. In addition, a number of other record-breaking deals were signed in 2022, including the costliest apartment ever sold in Dubai for Dh410 million. One property has been listed for sale at Dh800 million, which would be the costliest ever if sold.
As the emirate’s aviation sector and the overall economy recovered from the pandemic, Dubai has become the most connected city post-Covid in the world in 2022, up from second position during pre-Covid.
“I expect Dubai to remain the Gulf’s leading domestic market during 2023. Dubai has seen phenomenal growth since the pandemic, fuelled by its safe-haven status and its position as a luxury second home hotspot, combined with the government’s robust response to the pandemic, all of which have spurred business confidence,” said Henry Faun, partner and head of Knight Frank’s Private Office in the Middle East.
Knight Frank has projected that the prime property prices in the emirate are expected to see 13.5 per cent growth in 2023, the highest among all the major cities around the world, as high demand over the past couple of years has led to a shortage of supply in the premium market. While most of the other cities are likely to see moderate single-digit growth.
“Dubai leads the forecast with prime prices forecast to climb 13.5 per cent in 2023, its relative affordability, broadening global appeal and accessibility a key draw,” it said.
The emirate led in terms of prime property price increase for the second consecutive year in 2022, registering an increase of 44 per cent out of 100 markets tracked by Knight Frank.
“While the UK, as well as the European Union and the US, still attract considerable numbers of globally footloose wealthy residents, it is undeniable that Singapore and Dubai are emerging as critical wealth hubs. Dubai has developed a very pragmatic approach to attracting wealthy residents – and has worked hard to correct a perceived area of weakness, namely length of stay. Visa options used to be mostly short-term and work-related, but with the Golden Visa scheme, the longer-term residence becomes a possibility,” said The Wealth Report.
Arash Jalili, founder and CEO of Unique Properties, said the UAE’s post-pandemic resilience is in full effect in the country’s real estate sector.
“Prices have remained strong, especially in the luxury market, sometimes at as much as 50 per cent of the asking price. HNWIs are migrating to UAE from all over the world to fuel this growth, making sizeable purchases. We expect this upward trajectory to continue for the foreseeable future with prime estates offering the highest return on capital and Dubai’s continued standing as a global destination for residents and investors alike,” he added.