The luxury sales and rental market in Dubai is the busiest it has been in years, say brokers, who feel that the pandemic has made high-net-worth individuals put a new emphasis on buying comfortable homes. “We are witnessing a huge shift in the market with a big uptick in activity in villa communities. There has been particularly high demand in areas like the Palm Jumeirah, which offers a perfect beach retreat, Al Barari, which affords residents large built-up areas and plenty of greenery, and Jumeirah Golf Estates, which is perhaps the premier family community in Dubai,” says Andrew Cummings, co-founder and managing director of Luxuryproperty.com. “Even those who have had been on the fence previously, they now know the importance of living in the right property. Our client enquiries in June have doubled those in February and March.”
A UAE couple, seasoned investors in the emirate, is currently completing the process of buying a six-bedroom fully-furnished villa in Al Barari. It’s a Dh10-million-plus investment and the couple agrees that the property has ticked all the right boxes.
“Dubai is a familiar market for us. We have invested in several properties in the emirate. But now we wanted something big enough for us to live in and this six-bedroom villa in the beautiful green community of Al Barari was perfect,” says the buyer. “It’s the right time to buy for us.”
Another buyer who has invested in a four-bedroom Entertainment Foyer villa in Jumeirah Islands worth Dh4 million, says, “I bought the property now as it was available in the right location and in the community we were looking at. The price was attractive and I believe that we got a good deal although we paid slightly more than we wanted. The price is important, of course, but the home ticked all the boxes and that overruled the budget. I don’t really see the property prices changing much at all over the next five years.”
The typical profile of the luxury buyer has changed, says Cummings. “Given the closure of air travel, the clients are now predominantly Dubai residents looking to either upgrade their homes, or change their living style from apartments to villas. The international clients are still there though and are building a strong pipeline for once air travel restarts,” he says.
Less affected by uncertainty
Lewis Allsopp, CEO of Allsopp & Allsopp, explains that at the luxury level, people are affected less in times of uncertainty such as the current pandemic, and instead see it as an opportunity to buy and invest, rather than sit on the sidelines.
The price stability in the luxury sector is driven by a lack of stock, Cummings says. “In prime areas such as Emirates Hills, Palm Jumeirah and Al Barari, there simply is not the quality and numbers of stock to meet demand, putting a premium on quality turnkey products.”
Allsopp says leads have also increased in the last three months: just under 60 per cent for villas in Jumeirah Golf Estates, 26 per cent for Garden Homes on Palm Jumeirah, 147 per cent for the Canal Cove villas and 41 per cent for Al Barari.
In Emirates Hills, while the average asking price dropped by 3.7 per cent, the percentage of asking price achieved is at the same level as at the end of 2019 and the start of 2020. So while the market has dropped roughly 3.7 per cent, it may not be as bad as many people think, says Allsopp.
“Most of our buyers that purchase luxury are end users buying their family home. They are mostly looking to stay in Dubai long term and are purchasing their dream home and not looking to get an immediate return on the property.”
The high activity levels in Dubai are being mirrored around the world. In the UK housing prices have rebounded with sales increasing by 137 per cent post lockdown. In Los Angeles, Cummings says one of his firm’s partners reported unprecedented demand. So it is safe to say that now is the time to buy, says Cummings.
Chris Whitehead, managing partner at Gulf Sotheby’s, says, “In the luxury segment if you have the available cash reserves, you can benefit from those that need to liquidate and capitalise.” Whitehead sees promise in the Palm Jumeirah Villas, Al Barari, District 1 and Emirates Hills. “So far we have seen little decline in price for these areas. Communities such as Emirates Hills tend not to have sellers that are immediately impacted by this type of situation. If the pandemic is controlled and declines then I strongly expect 2021 to be a strong recovery year. The UAE always bounces back first.”