Dubai luxury property market to maintain fastest growth rate in H2.
02 August 2023, 12:00 AM
31 August 2023, 12:00 AM
Dubai’s luxury properties demand will remain strong in the second half of 2023 and will be the fastest growing market among all the major cities around the world on the back of the continued inflow of millionaires, with the market facing a supply shortage of high-end units.
After an 11.2 per cent increase in capital value during the January-June period, industry analysts project another up to 10 per cent increase in prices of high-end units during the second half, maintaining the fastest growth rate for the whole year.
Also, the luxury segment will continue to drive the capital value of the mid and affordable units as well.
Prathyusha Gurrapu, head of research and consultancy, Core said, “With record-breaking sales prices and robust sales absorption, sales prices are expected to see steady increases in the range of 5-10 per cent over second-half of 2023.”
“While historically Dubai’s ultra-prime market has been considerably cheaper than other global cities, with the recent launch of many uber-prime properties and branded residences such as Bulgari Lighthouse, Como Residences, Baccarat Residences and Six Senses Residences, the gap is being bridged,” she added.
According to Savills Research, prices of prime residential property in Dubai will increase between 6 to 7.9 per cent in the second half of 2023, the fastest pace in the world, followed by Singapore and Bangkok.
“We forecast that Dubai will achieve the highest growth for the remainder of 2023, benefitting from the continued relocation of ultra-high net worth individuals,” said Paul Tostevin, director, Savills World Research, and Swapnil Pillai, associate director, Middle East Research at Savills.
“It reflects a strong investor appetite, which I believe, will continue not only for the rest of the year but also continue well in 2024. Although the prices are significantly high compared to the lows of the Covid-19 pandemic period, it is still reasonable and in some cases, there is room for further growth. It is also good for property buyers and investors as the increased rental yield makes up for the increased price. So, for a Dh1 million apartment, investors can still count on Dh50,000 – Dh70,000 rent, which is between 5-7 percent annual return on investment,” said Sajan.
Prathyusha Gurrapu said on the back of strong high net worth individuals demand from international and resident buyers and highly favourable socio-economic drivers, the Dubai ultra-prime and prime market is expected to continue witnessing a strong H2 2023.
“This is further evidenced by the successful launch and take-up of many luxury properties across Dubai,” she added.