Demand for luxury homes in Dubai continues to skyrocket, thanks in no small part to our emirate’s sustained economic growth, investor-friendly regulatory framework, and well-deserved reputation as an international safe haven. Buyers are not only investing in high-end property, but also in the Dubai lifestyle – world-class amenities, safety, respect for privacy, and a strategic location in the heart of the Middle East.
With the population forecast to hit 7.8 million by 2040 and an ongoing influx of high-net-worth and ultra-high-net-worth individuals (HNWIs and UHNWIs), it seems likely that demand for luxury property in our emirate will continue to rise for the foreseeable future.
The question is, what steps can Dubai’s real estate community take to boost the supply of luxury homes and keep pace with growing demand?
Invest in the project pipeline
Between the first and third quarters of 2024, Dubai witnessed a sharp drop in listings of $10 million-plus homes – almost 1,700 fewer than the corresponding period of 2023. It is important to note, however, that this is by no means a negative trend for our emirate’s ultra-luxury real estate segment. On the contrary, current scarcity reflects the strong international appeal of Dubai’s premium property market. After all, exclusivity plays a major role in determining the value of high-end homes.
Even so, our sector must take steps to ensure supply does not fall too far behind demand – especially given that the majority of the existing stock has been purchased, and many of those fortunate enough to own one of these prized properties are choosing to hold on to their investments. In my opinion, the magnitude of interest in Dubai’s ultra-luxury real estate segment makes a compelling case for further development. While there is no single solution when it comes to increasing inventory, property leaders can help ease supply-related pressure through strategic planning and savvy investments in the project pipeline.
This is why elite developers like AHS Properties remain laser-focused on bringing new, superior-quality inventory to the market. Spanning multiple highly sought-after, prime locations, our company’s extensive development pipeline features an array of ultra-luxury residential projects, including Casa Canal, One Canal and One Crescent. A common theme that applies to all these projects is our ability to provide exclusive living experiences that exceed the expectations of even the most discerning buyers.
My last point is not mere hyperbole. On the contrary, it is crucially important for developers in our segment to keep sight of the ‘luxury’ aspect. Amid unprecedented demand, some may be tempted to compromise on quality for the sake of expedience, but HNWIs and UHNWIs will not settle for second best. If Dubai’s real estate market is unable to cater to their requirements, they will simply look elsewhere.
Develop the prime neighbourhoods of tomorrow
“Location, location, location” is an oft-repeated phrase in real estate circles, and nowhere is this mantra more apt than in the luxury segment. Make no mistake – the sustained popularity of Dubai’s premium property market will hinge on our collective ability to develop the prime neighbourhoods of tomorrow.
Close collaboration between Dubai’s government and private-sector stakeholders will be key to facilitating the creation of new upscale communities across the city. Fortunately, significant steps have already been taken to ensure joined-up thinking between policymakers and business leaders.
For example, last year’s introduction of Federal Decree-Law No. 12, relating to public-private partnerships (PPPs), set the stage for public-sector entities and property developers to work together on safeguarding the future pipeline of high-end homes in desirable locations.
His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence of the UAE, gave a further boost to these efforts recently with the announcement of the Real Estate Strategy 2033, which aims to increase the value of our emirate’s property transactions to AED 1 trillion ($272 billion) in less than ten years.
This ambitious plan involves a series of programmes designed to elevate the quality of developments, enhance transparency, leverage data for better market forecasting, integrate artificial intelligence (AI) within the sector, centralise data and deliver high-grade assets. It also includes a commitment to develop balanced, cohesive communities while attracting fresh investment and improving the customer experience for buyers and sellers alike.
As a key pillar of the Dubai Economic Agenda (D33), this strategy looks set to further enhance our emirate’s attractiveness to investors, creating a virtuous circle for the luxury real estate sector.
Upgrade existing stock
Sustainability is another key driver behind Dubai’s Real Estate Strategy 2033. In addition to constructing new developments around sustainable principles, property professionals are being tasked with renovating older homes to make them fit for the future.
Realising the full potential of existing units in prime locations has been one of AHS Properties’ key focuses since launching in 2021, as demonstrated by our success with multiple villa transformation projects. In fact, I have touched on this topic previously in this very blog, offering a behind-the-scenes glimpse of how our skilled team redeveloped the already-impressive Sun Rays into an uber-luxury dream home with a value of $25 million.
AHS Properties remains committed to playing its part in meeting soaring demand for ultra-luxury real estate in Dubai in a sustainable manner, which is why we continue to prioritise the acquisition of premium plots in strategic locations. The good news is that our emirate is home to a large number of such units, which – in the right hands – have the potential to be transformed into new ultra-luxury inventory.
Ultimately, if Dubai’s luxury real estate community can continue to bring fresh offerings to market, all signs point towards further growth for the segment. However, there is no room for complacency. Long-term success will require sustained investment in the project pipeline, effective public-private collaboration to develop the prime neighbourhoods of tomorrow, and a willingness to elevate existing inventory to a level that attracts HNWI and UHNWI investors.
Given the ever-growing popularity of Dubai’s ultra-prime property market, keeping pace with demand will not be easy. Nevertheless, I am confident that our emirate’s luxury real estate community can rise to the occasion.
