There is still enough demand around for $10m homes in Dubai from world’s wealthy
Published: March 08, 2022 16:53 Manoj Nair, Business Editor Gulf News
Dubai: Season 2 of Dubai property market’s turnaround story is doing just as fine as the first. And doing even better in the super-premium end of the villa and mansion category, where demand is running just as strong as it did in the whole of 2021.
That’s right, 2022 has all the makings to make for another bumper year for Dubai and its luxury homes, those built and those on the way. Sure, the initial weeks of January were relatively quiet when it came to high-end home transactions, as investors took a breather and also because they and the property market had to get their bearings back after the Omicron spread. By the beginning of March, all those doubts are receding, even though the world is grappling with the Russia-Ukraine conflict and its fallout.
“It’s a sellers’ market when it comes to super-luxury homes in Dubai. We came up with a firm interest from a buyer for a Dh180 million home, only to be told by the owner that he can sell only for Dh250 million,” said Firas Al Msaddi, CEO of fam Properties.
Based on the feedback from the market, this particular seller won’t be waiting long to get what he wants.
A ‘discovery’ of Dubai
It may not have been instantly obvious, but the series of steps that the UAE took on to confront the pandemic and get it under control had much to do with the Dubai real estate recovery from five years of value decline. Then came the re-opening of travel to Dubai in July of 2020 – “That’s point when the global rich started to frequent Dubai because there was no other place that was open,” said Al Msaddi. “Dubai became their primary or secondary home, or their winter getaway destination.”
It shows up in the 2021 numbers. Knight Frank, the UK property consultancy, in a report released Tuesday (March 8) said there were 93 homes worth $10 million or over that sold in Dubai last year. Those high-value 93 homes are more than what the previous five years combined could deliver.
“The international elite continues to have an insatiable appetite for Dubai’s most luxurious homes,” said Faisal Durrani, Partner – Head of Middle East Research at Knight Frank. “In fact, 2021 accounts for 39 per cent of all $10 million home sales in Dubai since 2010. This underscores the phenomenal depth of demand at the top end of the market.”
Dh100m villa sales, Dh1m rents
In all, there were sales worth Dh114 billion in Dubai property market last year, with a handful of them being Dh100 million plus homes on the Palm. (There were even homes that rented for Dh1.5 million to Dh1.7 million – it was that kind of year.)
A category of its own
More super-premium properties are being readied for a launch by Dubai’s developers. Sure, they will have to factor in uncertainties set off by the Russia-Ukraine crisis, such as higher cost of building commodities, etc. But in the premium end of the market, the confidence is very much there for another repeat performance.
“Considering where Dubai is positioned, it will continue to attract high net worth investors and there will continue to be such projects being launched,” said Niraj Masand, Managing Director at Artha Realty. “We are aware of three to four projects awaiting clearances with units starting at $2 million.”
Beyond the Palm
There are a handful of projects that are coming off the pipeline shortly, at some of the most desirable locations in the city. Plus, the Palm will continue to have more choice properties, from Sharjah’s Arada and the ‘Palm Flower’, which will be designed by UK’s fabled Foster + Partners. There is another near complete project where a penthouse is awaiting a buyer with a Dh180 million price tag.
Beyond the Palm, there is District 1 and the Dubai Hills Estate, while Sobha Realty is readying another $4 billion project next to its Hartland.
According to Durrani, the top end of the Dubai property market plays to its own tine. “The big question on everyone’s minds is whether this is the start of another price-bubble,” he said. “The answer is: it’s complicated, but probably not. It really depends on which price points you look at.
“While supply remains a perennial downside risk, total stock in ‘Prime Dubai’ forms a fraction of the wider market. In 2022, just 3.6 per cent of what’s planned will be delivered in prime sub-markets and this is where demand continues to intensify, suggesting there is still room for further price expansion in this segment of the market.”