1st August 2023, Khaleej Times
The growing segment offers several opportunities for investors and developers as the UAE economy continues to outpace its global peers.
The UAE has established itself as a hub for investors, entrepreneurs and is home to some of the world’s wealthiest people and an increasing number of expatriates. The country’s tax-efficient environment, global connectivity and ease of setting up a business has made it a prime destination to park wealth.
With the country’s GDP on the rise, income generated is distributed among the population, increasing the average per capita income. This increase has translated into a higher standard of living for residents, offering them greater financial resources and purchasing power. The improved economic conditions and higher per capita income in the UAE has acted as significant driver for high-net-worth individuals (HNWIs) seeking attractive investment opportunities and a luxurious lifestyle in the country.
Moreover, factors such as its safe haven status, highly diversified economy, well-established healthcare system, luxury shopping and restaurants on offer, prime residential property market, reputed international schools and all-year round leisure activities have aided the influx of wealthy individuals in setting up their homes, on UAE shores.
The government has also pushed towards establishing itself as a hub for wealthy and potential investors. It has opened up several economic sectors to 100 per cent foreign investment. It has also begun a ‘UAE Residence by Investment’ program, under which qualified individuals are given a 10-year renewable residence permit to retain talent and draw even more wealthy foreign investors. The UAE has recently implemented long-term visas and reduced certain job visas and social norms to improve its international image and attract those who wish to live, work and invest there. In 2022, the UAE attracted more than 5,200 HNWIs, the highest globally.
Following the Covid-19 pandemic, Dubai became the preferred resort for the world’s wealthy, hosting approximately 68,400 millionaires. According to Henley & Partners’ ‘Private Wealth Migration Report 2023’, more than 4,500 millionaires are expected to relocate to the UAE this year.
Most of the HNWIs will relocate to the UAE from India, followed by the UK, Russia, Lebanon, Pakistan and other Asian and African countries. The UAE is home to around 109,900 millionaires with $1 million-plus wealth, 298 centi-millionaires with $100 million-plus assets and 20 billionaires.
The influx of HNWIs in the UAE has stimulated demand for the already thriving real estate market, especially for luxurious properties in Dubai that offer exclusive amenities. These discerning investors seek upscale residential properties, including high-rise penthouses, luxury villas, and waterfront mansions, among others.
The UAE’s real estate market has responded to this rise in demand by providing a wide array of prestigious projects with developers focusing on state-of-the-art infrastructure, often incorporating exclusive services and features such as private beach access, yacht berths, and personalized concierge services to cater to the expectations and preferences of HNWIs. Notably, Dubai has been ranked as the world’s fourth-most active market in the luxury residential segment as sales of prime properties continue to rise.