20 July 2023, Gulf News
When the freehold law was issued in 2002, Dubai had 700 real estate transactions at the Land Department for the first-half of 1997. In the first six months of 2023, Dubai had 61,000 transactions.
In the past, real estate experts were quite cynical of the longevity of this industry’s prospects in Dubai, and whether Dubai could become a global real estate megapolis.
They did so not even taking into account the natural evolution process of such sectors. In 2009, Dubai was being compared to the likes of Manhattan and London’s Mayfair, in terms of quality, finishing, supply, unjustified premiums, and lack of trophy assets. Which at its core was shows the naivety of these analysts.
Dubai property had various stages of development it had to go through. But even its formative stages, the market was being called upon to catch up with the most mature real estate investment destinations in the world.
And then came the inevitable chatter about over-supply and who would buy all the homes being built or delivered.
Let me say here, when a new industry is being created, the basics must be covered first, to establish momentum and create real demand, I mean who would buy a $200 million dollar home in an unknown destination?
Dubai had to create the infrastructure to support the market for creating – and selling – such high-premium homes. And eventually, the city has become the true home for such trophy assets. In 2022 Dubai surpassed the value of real estate transactions in New York, Paris, London and Hong Kong. And it seems like in 2023 we are on our way to setting a new record.
More price highs in sights
Today, Dubai has the highest number of $10 million plus transactions in the world, and, soon, it should announce the most expensive penthouse and the most expensive villa ever sold. It is imperative to note that the average price per square foot in Dubai is still significantly lower than those other cities, where it could go up to $20,000 a square foot in some neighbourhoods, while Dubai is still at $1,600.
Imagine what kind of prices Dubai will achieve in the near future. Of course, such trophy assets cannot fetch such numbers unless they possess the highest level of quality and standards. Yet all of this evolution took place in less than two decades. At this pace, Dubai will set the new gold standard for real estate. It is safe to assume that there are still a lot of gains to be made by all industry participants.
It is not too late to enter now…