Dubai: Ultra-luxury property market heavily undersupplied as supply is absorbed, says expert.
18 March 2023, 12:00 AM
30 April 2023, 12:00 AM
Affluent buyers are flocking to Dubai to cash in on the attractive deals for high-end properties whereas Dubai’s ultra-luxury property market is heavily undersupplied, as most of the supply is absorbed at an unprecedented level.
Due to short supply, industry executives suggest that there will be a smaller number of transactions for ultra-high properties in 2023.
Dubai is a magnet for ultra-high net-worth individuals for many reasons including safety, security, and low taxes. Moreover, savvy investors are attracted to the quality of finishing and materials that Dubai luxury developments have as they use the top brands for design elements.
Abdullah Alajaji, CEO and founder, Driven Properties said, “This market is the most in-demand and the most undersupplied. Since the onset of Covid-19, this market has thrived and most of the market supply was absorbed by end users in this category. Inevitably, this could lead to lower transactions in the secondary market in 2023, as most of those who bought in the past three years have settled in, and have no intention of reselling, even though prices have soared."
In 2022, the Henley Global Citizens Report projected the UAE attracted 4,000 millionaires, the highest in the world.
Asa result, the emirate’s real estate sector has seen some record deals, of late, such as the most expensive ultra-luxury apartment sold for Dh410 million, and a Dh600-million villa sold on Palm Jumeirah – the costliest property sold ever in the emirate.
Petri Mannila, sales director of Penthouse.ae, said interest from millionaires mainly from Europe and the USA is fuelling demand, even as the price of opulent properties in Dubai continues to rise sharply.
“I have never seen this much interest from HNWIs interested in moving to Dubai to either live here or for business. Demand for Dubai’s uber-luxury residences has reached unprecedented levels as the political and economic situation in affluent western markets, Russia and Asia, continue to be uncertain, encouraging wealthy individuals to turn to safe havens where they can protect and grow their investments,” said Mannila.
“This is really a brand new segment in Dubai’s real estate market, given the fact that two years ago, such deals were only a handful, almost non-existent – yet today, we are witnessing a market that this year may exceed Dh35 billion in transaction value,” added Mannila.