Dubai:Developers in the UAE and elsewhere take note – the world’s wealthy have plans to buy new homes or other real estate assets this year.
According to Knight Frank’s ‘The Wealth Report’, 26 per cent of ultra-high networth individuals – those with $30 million and more - globally are planning to buy a home, which is quite an improvement from the 21 per cent who said they would in 2020. This likely demand could push prices up by 7 per cent in key markets over the course of the year.
“The pandemic is super-charging demand for locations that offer a surfeit of wellness - think mountains, lakes, and coastal hot-spots,” said Liam Bailey, Global Head of Research at Knight Frank.
"The pandemic, far from undermining the city, has shown up the potential for rebirth - expect to hear a lot more about the 15-minute city, green cities, place-making and the coming redevelopment boom. No wonder development land is the third most popular pick for property investment this year for UHNWIs."
Dubai came in second place (42,356 homes worth Dh3.6 million or over) and Sydney (27,436 homes) in third.
Favoured options
The rich from the Middle East will likely spend on property in the UK, the US, Spain and the UAE. In fact, 31 per cent of UHNWIs plan on such a buy this year.
Whilst Dubai’s prime residential market saw prices decrease by 5.9 per cent in the year to November 2020, we are beginning to see signs of a recovery in price performance in some prime sub-markets
Palm shows the way
In fact, some of the buying may already have started. Late last year, enquiries and actual deals involving luxury property in Dubai recorded improvements.
On the Palm, apartment and villa prices gained 5.1 per cent and 9.4 per cent, respectively, in the six months to end December. “Over the same period, villa prices in District One increased by 3.5 per cent,” said Taimur Khan, Head of Research at Knight Frank Middle East. “Other prime markets such as Downtown Dubai and Emirates Hills are also showing similar signs of improvement in market performance.”
- Auckland headed the charts in Knight Frank’s Prime International Residential Index for 2020 with property values rising 18%. New Zealand’s handling of COVID-19, its rapid economic recovery, ultra-low mortgage rates and limited supply of stock played a part in the value hikes.
- Asian cities occupy the next three rankings: Shenzhen (+13%), Seoul (+12%) and Manila (+10%).
- Australasia (4.9%) and North America (6.3%) were the top-performing regions in 2020. Both saw a surge in pent-up demand as lockdowns eased and homeowners re-evaluated their lifestyles.
- Ten of the 11 North American markets tracked in the Knight Frank index were in the Top 20 global rankings. Palm Beach was a key super-prime hotspot recording 20 sales above $20 million in 2020, up from 10 in 2019.
