A quick glance at the news over the last year reveals several record-breaking uber-luxury property sales in Dubai, many of which cost tens of millions of dollars.
As we all know, Dubai is peppered with uber-luxury, bespoke properties, many built to the owner’s specifications, with unique materials, features and designs.
The Dubai property market saw a post-pandemic uplift, and the uber-luxury market looks set to remain buoyant throughout 2023 and well into 2024, at least.
Property developers like DAMAC saw profits return last year following the challenges associated with the pandemic. The company is behind a number of increasingly luxurious property developments in Dubai and further afield, eyeing the growing desire for luxury property.
There has been a global rise in the number of Ultra High Net Worth Individuals (those with assets in excess of $50m), with Credit Suisse suggesting UHNWIs grew by 50% during the past two years.
The surge in wealth is credited to rising house prices and booming stock markets.
Rising geopolitical tensions and global economic instability has left the uber-rich looking for solid property investments in a stable, growth economy – and Dubai ticks those boxes.
Despite the record sales figures – in individual property terms – Dubai’s real estate market remains globally competitive. The saying ‘getting more bang for your buck’ comes to mind; in older markets such as London or New York, the size and style of property are often limited by the surroundings, planning laws and preservation regulations.
Dubai has space, greater planning freedom, and the infrastructure to support creative design and build.
The government allows people to purchase land to build on, providing they follow developers’ guidelines, and get architectural designs approved from the developer and land department before beginning construction.
Last year, Abu Dhabi Islamic Bank (ADIB) launched a plot financing offering enabling customers to purchase a piece of land as an investment or to build a house.
Uber luxury buyers – if not buying purely as an investment – will normally have very specific ideas in mind when it comes to property design, so the build-from-scratch option makes a great deal of sense.
And of course, from a paperwork point of view, it’s easier to build a property from your own designs than to try and amend an existing property.
Cash remains king in a majority of Dubai purchases, too, with records showing around 70% of purchases are made with cash rather than loans or mortgages. This, of course, means the market is less twitchy when it comes to interest rates.
While interest rates are variable around the world – often meaning people can only access fewer funds for a higher interest rate – Dubai remains a safe haven, with lower-than-average mortgage rates for those that purchase with a mortgage.
Of course, in the uber-luxury sector, mortgages are rarely seen. This is a sector which attracts those with great liquidity or assets that can be readily transferred or exchanged.
Dubai’s growing market for uber-luxury property bodes well for the emirates’ property sector, with expectations that 2023 will see an uber-luxury property market valued in multibillion dirhams.
Scarcity certainly increases prices, with some prime locations across Dubai seeing a doubling – or more – of prices year-on-year. In the last year or two, we have witnessed the rise of a new class of properties over AED75m ($20 million), commonly known as super-prime properties.
And many of those super prime properties are available by my own uber-luxury property company, AHS Properties.
In Dubai, I believe we have a ‘perfect storm’ of world-class infrastructure, highly sought-after communities, sensible, mature and transparent planning and real estate regulations, and a strong, growing economy. These factors, I believe, mean we will continue to see steady growth in the uber-luxury property market.