Dubai’s Luxury Home Market Thrives As Wealthy Buyers Flock To The City
An influx of wealthy buyers setting up second homes in the city drove up Dubai luxury home market prices by 89% over the past year, according to Dubai’s real estate company Director, Nishchay Mehra.
Dubai’s Swift Covid-Handling Capability Bears Fruit
During the Pandemic, high-end neighborhoods in Dubai such as Palm Jumeirah, Emirates Hills, and Jumeirah Bay Island experienced price increases of more than 100% due to “insatiable demand”. There was a strong correlation between buy-to-let and buy-to-flip purchases in the emirate’s two previous market cycles.
With the handling of Covid-19 by Dubai’s authorities, attracting the attention of global investors, the relentless demand from the rich has fuelled a spectacular turnaround in Dubai’s luxury home market.
Liberal Visa Policies
Increasing foreign buyers are flocking to Dubai, attracted by its liberal visa policies and the government’s handling of the pandemic. Rich Indians seeking second homes, bankers fleeing restrictive Covid restrictions in Asia, and Russians seeking to shield their assets are benefiting from a surge in the Dubai luxury home market in the emirate.
Houzon’s Take On Luxury Property Market In Dubai
In the third quarter alone, Dubai’s premier residential properties experienced a 29% increase in value, driven by a constant deluge of ultra-high net worth individuals who seek second homes in Dubai’s premier districts,” said the director of Houzon.
A new high was also reached for properties priced over $10 million. The number of ultra-prime sales surpassed last year’s 93 in the first nine months of this year. There is also a shortage of waterfront homes, an indicator of a change in previous cycles.
According to Mehra, only 8 new villas are scheduled for Jumeirah Bay Island between 2023 and 2025 in prime residential areas in Dubai. In spite of the wave of Dubai luxury housing demand, developers have not yet rushed to market new projects as they have in the past. The property consultants at Houzon expect short-term and medium-term price growth of 5% to 7% by the end of the year, with 2022 prices being 60% to 80% higher than last year.
In the event of a strong dollar and increasing interest rates, the market could be affected, although it is expected that cash buyers will “protect the market to a certain extent.”
Why Russians Are Flocking To Dubai?
Wealthy Russians have been flocking to Dubai to park their assets, even though many of the new buyers are from countries such as Switzerland, Germany, and France. As opposed to many Western nations, the UAE has not imposed sanctions against Russians as a result of their invasion of Ukraine. In fact, Dubai has become a yacht sanctuary for oligarchs, one of the few places that prevent asset seizures. Dubai had already been a favorite destination for Russians, but now it is one of the few safe havens.
No Signs Of Market Slow Down
In contrast, some claim that a possible housing bust is looming as a sign that the boom is over. An opinion poll conducted by real estate experts in Dubai forecasts a 6.5 percent drop in Dubai’s home prices in 2022 and a 3 percent decline in 2023. Some analysts, however, believe that the Dubai luxury home market might not slow down soon.