While there’s a global air of doom and gloom regarding the economy, looming recession and geopolitical turmoil, I believe the outlook for uber luxury real estate remains positive in 2023.
Statistics reveal that the number of High Net Worth Individuals (those worth more than $1m) is increasing, with Knight Franks’s annual wealth report revealing the number of ultra HNWIs (those with wealth exceeding $30m) grew by 9.3% globally between 2021 and 2022. Indeed, a recent report reveals that there are around 67,900 HNWIs in Dubai, a figure analysts say is rising month by month.
Indeed, 2023 is set to be a year characterised by the greatest influx of UHNWI migrations into the UAE, mostly comprising millennials. The UAE’s nascent digital nomad visa, as well as a raft of attractive investor programmes, certainly offers tempting incentives for those looking to make the UAE home. Dubai has the highest concentration of millionaires in the Middle East, according to data compiled by Henley & Partners.
This group of influential people are ever more drawn to property as an investment class, while cryptocurrencies and stocks and shares seem to be viewed as increasingly volatile. Add this fact to scarcity in the uber-luxury home sector, and we will continue to see price buoyancy, if not a slight increase. I believe 2023 will remain a seller’s market, especially here in the UAE, where Dubai recently topped a global list of luxury property growth markets. Luxury property prices are only expected to rise by 2% in the emirate this year, but given the higher price tag for uber luxury, that’s still some increase.
Scarcity is an issue, with builders seemingly inundated by demand. Our city’s most luxe developments are limited by space, of course – especially the Palm Jumeirah and Emirates Hills, for example, where a mansion sold in 2022 for a record-breaking AED75 million ($20.4 million). And more recently, an Emirates Hills villa hit the market with a $51.7m price tag.
Meanwhile, Palm Jumeirah’s fronds are picking up the moniker of ‘Billionaire’s Row’ as prices continue their upward flow.
Last year saw a large influx of wealthy people, drawn by the UAE’s infrastructure, property prices, lifestyle, ease of visa application and of course, the advantageous tax regime.
A brief glance over the daily news unearths plans for penthouses, uber luxury villas, serviced and managed apartments and unique properties such as those on the World islands. As Dubai tops the world’s most desirable places to live, and is named the fastest growing luxury real estate market, it’s no surprise that we expect to see continuing interest from the global UHNWI sector.
Globally, US cities remain popular, with Miami and Los Angeles attracting investor interest. But the US market is more likely to fall into recession, mortgage rates are high, and there are rumours of a mansion tax in LA.
And what trends are emerging in the sector this year? I expect to see more spending on purchasing uber-luxury property as safe haven investments. I also believe the price predictions will come true – and the global market will remain tipped in favour of sellers, due to scarcity and the ever-growing popularity of uber luxury property.
The 2022 Douglas Elliman and Knight Frank Wealth Report underlines just how large a proportion of private capital is being invested in property, with private investors increasing real estate investments by 52% in 2021.
While we may be living through a period of great global uncertainty – one thing is certain in my mind – uber-luxury properties will continue to be extremely popular throughout this year.