Dubai: luxury real estate is expected to double its market share in 2022 – News

High net worth individuals, millionaires and entrepreneurs will drive the growth of the luxury real estate market

Published: Sat 25 Jun 2022, 08:01

The luxury real estate market in Dubai will continue to rise in the second half of the year as the limited stock of prime and ultra-prime residential units is unable to meet growing end-user demand and foreign buyers, according to experts.

Industry specialists, analysts and market experts have said that demand for prime and ultra-prime properties in Dubai has been on the rise since the start of the year as high net worth individuals (HNWIs), millionaires and entrepreneurs are looking to relocate or buy a second home in Dubai.

Referring to the recent report, they said 4,000 HNWIs are expected to relocate to the UAE this year as the country demonstrated its ability to manage the Covid-19 pandemic, successfully hosting Expo 2020 Dubai, providing a excellent connectivity and 100% foreign ownership of the companies. and the introduction of a series of visa reforms.

They further stated that the Russian-Ukrainian conflict is also attracting cash and investment to Dubai from the affected regions.

Luxury a resilient segment

Prathyusha Gurrapu, head of research and advisory at real estate consultancy Core, said the high-end and ultra-prime residential market was relatively resilient compared to the affordable and mid-range segment during the 2014 period. -2020.

“We have seen a marked increase in demand for prime residential properties since the fourth quarter of 2020. In fact, 2021 saw the highest secondary market transactions above 10 million dirhams during the decade, with Palm Jumeirah accounting for nearly 35% of those transactions,” Gurrapu said.

“This trend of robust demand for prime residential continues in the first quarter of 2022, with prime transaction volumes exceeding 10 million dirhams, 140.2% higher than the same quarter of 2021. “, she said.

Clarifying, she said that around 483 deals above 10 million dirhams were signed in the January-March quarter of this year, compared to 201 in the same quarter last year.

“Villa transactions exceeded apartments as 305 villas and 178 apartments were sold in the first quarter of 2022, compared to 150 villas and 51 apartments in the same quarter last year, as demand for the luxury market comes from both end users and foreign investors,” Gurrapu said. Khaleej times.

While prime residential prices are well in line with 2014 prices, many buyers are largely indifferent to historic prices and find prime beachfront properties in Dubai to be priced competitively with most. global cities, according to Core’s first quarter report.

Tight supply for luxury properties

With very high transaction volumes compared to previous years and the ready stock of this segment supported by HNWIs, the lack of inventory in the secondary market has pushed more interest into the main off-plan market. Recent launches in the high-end market reflect this trend and have seen strong uptake, he added.

The report further states that the main market is seeing a record number of transactions, it still represents only a small fraction of the overall Dubai market – a similar scenario seen in most global housing markets. However, experts said the luxury real estate market is expected to double its share this year due to an influx of investors showing interest in the segment.

“To give perspective, transactions above 10 million dirhams accounted for only 3.3% of all secondary market transactions and 1.4% of all off-plan market transactions during the first quarter of 2022,” according to a Core report.

Luxury has a bright future

Imran Sheikh, founder and CEO of BlackOak Real Estate, said prime and ultra-prime properties have a bright future due to growing demand from overseas buyers.

“We are seeing strong demand and the trend to continue as more profiles and HNWIs move into the area. As the supply of good quality, well-designed and modern state-of-the-art properties technology is limited, demand will exceed supply in the short term,” Sheikh said.

H2 to see more offers

Ata Shobeiry, managing director of Zoom Property, said the strong figures produced by the luxury real estate sector in 2021 and the first half of 2022 have sparked interest from investors, who will play a key role in the growth of this market in the second half.

“With more developments including high-end properties backed by state-of-the-art amenities, we can expect the second half of the year to produce even better numbers,” Shobeiry said. Khaleej times.

In response to a question, he said that the luxury real estate sector appeals to both investors and HNWIs. However, with the reform of visa rules due to be implemented in September 2022, “we will see more foreign investors” venturing into the market.

“As luxury properties dominate the real estate sector, they will try to take advantage of the situation. This will play a positive role in maintaining the demand for luxury properties while benefiting the overall real estate market,” he said. .

About Tammy N. McFarlane

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