Record sales deals and rental contracts of Dh1 million and over. A lot keeps happening in Dubai property market. Image Credit: Shutterstock

The one thing that has always held true for Dubai is that it’s a city of surprises.

Nobody could have predicted that this ‘megapolis’ in the desert would become the center of global interest in a post-Covid landscape. Following landmark events like Expo 2020, many have been holding their breath for a so-called bubble to burst – and they should really just exhale by now as their expectations continued to be defied.

The city saw record-breaking rainfall in April, yet bounced back so fast that it barely feels like we had more than the usual spring showers. The real estate market continues to soar, setting new benchmarks month after month.

This growth has emboldened sellers, particularly investors who bought when prices began to rise rapidly a couple of years ago. Their assets have now reached a point where they can generate massive profits, and they are making the most of it. As a company, we have been involved in quite a few record-breaking transactions over the first quarter of 2024.

New pricing records

There have been a number of sales transactions that my team has closed just over the past month and a half that have broken individual and community price records. These include the most expensive villa sold at Deema in The Lakes; the most expensive Montgomerie Maisonette in Emirates Hills; and a villa with the highest price per square foot ever achieved in Jumeirah Islands.

What’s notable about all of these transactions is that they occurred in large-scale master communities. This goes to show the strength of these communities and the value that they continue to offer for their residents, in terms of amenities and the ease of access to major city hotspots.

An area like Jumeirah Islands, for example, has really upped its value proposition with extensive renovations throughout the community. When you combine that with a unique home, it adds up to a price that luxury buyers are happy to pay.

Buyers want turnkey homes

Another factor that’s common to the homes mentioned above is that they have all been completely renovated. Not only that, they have been redesigned from the ground up to be wholly one-of-a-kind in the market.

Homes with a high design spec and unique features that are ready for immediate move-in tick a lot of boxes for buyers.

Whereas we had seen a huge surge in investors around two years ago who were looking for renovation opportunities for flipping, more end-users are coming into the market now. Some of those renovated properties are also coming to market, which works out quite well.

Luxury rentals stay strong

The rental space has seen new records being set as well, for largely the same reasons as I’ve outlined above. As a company, we have consistently done at least two rentals a month valued at Dh1 million or more over the first quarter.

The Palm Jumeirah is one of the most popular rental spots, but we have broken records in Dubai Hills and did some of the highest rentals in Jumeirah Golf Estates and Arabian Ranches recently.

There is still a significant imbalance between the number of people coming into the market and the units available. Even with the updated RERA Index, a rental increase on renewal at the higher end of the market is a lot lower than the premium you would expect to pay on a vacant unit that’s been fully upgraded.

Thus a lot of current tenants are still staying put, while new tenants are locking down the units they want, with a bit of future-proofing. As an example, our highest rental this year was a two-year contract, ensuring that the tenant doesn’t need to worry about rental increases for a little while yet.

The question of how long Dubai’s property boom can last is one that tends to pop up every few months. The simple answer to that is that it will continue as long as the demand is there. And the demand will remain as long as Dubai offers a high level of value for potential residents – that fact is unlikely to change.

The city is shoring up its infrastructure and implementing changes that will ease traffic flow (and benefit communities on the periphery), and it has shown the world its ability to manage the unexpected as the government took swift and decisive action after April’s storms.

A few recent articles have also been published outlining that $1 million buys about three times the square footage you would get in London or New York even today. Much like the weather over the next few months, I expect the market to only get hotter.