It's still some time before new super-luxury residences reach completion in Dubai. The will keep the demand meter running nicely for some more time. Image Credit: GDMO

The Dubai real estate market has seen significant shifts in demand patterns since the pandemic, resulting in renewed demand for ultra-luxury homes, waterfront villas, and prime offices. Prior to the pandemic, developers in Dubai did not focus enough on these categories, with the exception of the Dubai Harbour project, which brought out several luxury options.

As a result, there was a shortage of supply in the market at a time of high demand, which then pushed prices up rapidly. To address this, developers have started to develop properties that cater to the demand patterns. These projects are l under construction, and we can expect the first wave of handovers to begin in Q2-2024.

Investors with staying power

In this kind of situation, prices for upscale homes and offices - along with waterfront properties - are expected to grow steadily, or at least remain stable for the next three years. It is worth noting that most luxury home buyers are end-users who have strong holding power and a long-term view. They recognize that luxury properties in Dubai are still undervalued, not just on a global scale, but also in terms of the living standards they offer at reasonable prices.

It’s worth mentioning that this segment is likely to have a sustainable demand more than other segments. According to our records of sales transactions, over 95 per cent of buyers for this segment do not use mortgages. And which means these buyers and this category is certainly far less sensitive to the hike of interest rates.

Target these options

If you’re considering investing in Dubai real estate, it’s essential to look for areas and locations that offer limited supply of projects when viewed from an overall market perspective. For apartments, prime waterfront projects, especially those with direct beach access, like Emaar beachfront, and low-rise, low-density communities like Citywalk and Design District are options to consider. For villas and townhouses, look for properties that have convenient access to the CBD, and luxury villas that are very centralized and limited in supply, such as the Al Wasl Downtown Villas and District One.

With high demand and moderate supply, the Dubai real estate market is poised for sustainable growth, and investors who make strategic investments in this market can expect long-term returns.