More space, greater flexibility and units that tick the health and sustainability boxes are in demand even as property records continue to be set – all while delivering golden residency
Mask mandates and social restrictions may have been dropped for the most part, but memories of early-stage pandemic lockdowns continue to influence buyers’ real estate choices in Dubai, agents say. As more end-users come into the market, spacious homes with easy access to lifestyle amenities are in greater demand, in turn setting new sales records.
“In the post-pandemic era, luxury consumers are now looking for open and bigger spaces as buyers are more focused upon their health and mental well-being. This has led to registering record-breaking numbers in villa sales and rentals, as villas provide world-class amenities within the comfort of one’s own community,” says Neeraj Mishra, CEO of boutique real estate agency Scorpion Property.
“With more upscale buildings such as Atlantis, The Royal Residences and Six Senses in The Palm Jumeirah, we will continue to witness an increase in luxury projects as the demand from wealthy investors in this sector is on the rise,” he adds.
Capital values for luxury homes in Dubai grew by more than 44 per cent in 2021, the fastest growth among the world’s top 100 urban markets, real estate consultancy Knight Frank says. The pace has continued over the first quarter of this year, with overall total transaction volumes over the first quarter of 2022 at 19,009, the highest total ever, according to data from real estate consultants CBRE.
“As the world recovers from the Covid pandemic Dubai now stands as a strong, vibrant market leader in world-class luxury real estate provision catering to the very top end of a billionaire’s wish list,” says Richard Crossley, Sales Director at the property agent pH Real Estate, listing factors such as the liberal tax regime and excellent quality of life in a crime-free environment.
But recent investor interest also follows quick government action on the back of a successful coronavirus vaccination rollout and a slew of immigration and labour reforms, including a relaxation of visa rules and a path to citizenship.
“Even in crisis, Dubai has managed to create demand for luxury homes and hotel apartments,” says Rizwan Sajan, Founder and Chairman, Danube Group.
“The government of Dubai responded quickly and super effectively in controlling the pandemic and that sent reassuring calm to the money markets of the world, which then in turn brought the attention of the major investors and market movers to Dubai. On top of these, the effective handling of the COVID-19 pandemic over the last two years have made the UAE a more appealing, safe and secured place for global investors – who see the UAE and Dubai a safe place to live, work, conduct business and retire. The latest series of property-linked visa reform has made property purchase more attractive – it comes with a 10-year golden visa, depending on the value of investment,” Sajan says.
Real estate investors may obtain a 10-year-long ‘golden’ residence visa when they buy property worth at least Dh2 million following approval of a new rule by Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in mid-April.
“Dubai remains dramatically under-priced per square foot in the luxury real estate world compared to London and New York, then the world’s super rich and knowledgeable had to and have to give serious consideration to moving to Dubai,” Crossley says. “Having said that, they expect the quality and presentation they see in LA or London and won’t accept second best, so Dubai’s top end real estate had to up its game in its design, build quality and finish and give these ultra-discerning buyers what they need and expect: the latest home smart systems, top notch security and privacy.”
Developers continue to roll out high-end projects, from serviced residences to partnerships with luxury labels, that seek to tick all the boxes on buyers’ wish lists.
Francis Alfred, Managing Director at developer Sobha Realty, agrees: “Luxury investors now view their dream home as a space that is close to nature – preferring waterfront communities that can provide options between luxurious apartments, beautiful villas, or high-end townhouses. High demand can be observed for areas that can offer a holistic experience, complete with lush green spaces, world class amenities, and a wide array of authentic delicacies, retail centres, and entertainment facilities,” he says. The company’s sales over 2021 crossed $1 billion, setting a new record.
With 60 per cent of work on the 8-million-sq-ft Sobha Hartland now complete, Sobha is looking to launch another mega development this year. The new project, Hartland Sanctuary, is valued at $4 billion and cover a 200-acre area in Mohammed Bin Rashid City.
More recently, Damac Properties announced a partnership with Swiss jeweller de Grisogono, for a necklace-inspired twin-tower development at Safa One on the edge of Safa Park.
Similarly, in February, Saudi developer Dar Al Arkan announced the W Residences Dubai – Downtown. As the first standalone homes in association with the upscale hotel brand, the development promises uninterrupted views of the Burj Khalifa.
Andrew Covill, Director at estate agents Henry Wiltshire International, underscores how the pandemic has impacted sales at the top end of the market, from high-quality finishes to multi-functional layouts. “Demand for home offices and separation from family living areas are rising, as are gardens or terraces, as widely reported during the pandemic era. These features are highly important given the time many now spend working flexibly from home,” he says.
At the affordable luxury end, meanwhile, Danube recently launched Pearlz, a new residential project in the Al Furjan area. Besides amenities such as a health club, swimming pools and an events area, the development has a doctor on call and a kids’ day care centre.
Some apartments feature foldable wall-mounted beds so living areas can be converted into bedrooms, in line with demands for flexible spaces. Three-bedroom apartments at the development, meanwhile, have their own private pools as well as three parking spots.
Similarly, Sobha too is looking to cater to changing buyer demands. “Today’s homes need to be versatile, and work to enhancing relaxation and comfort, which is why luxury homes with high-end facilities are gaining preference. Investors are seeking spaces that will further their sustainable living ambitions, while also providing a modern edge through various technological innovations,” he says.
Sobha homes may now also include additional, under-the-hood features such as wireless home automation, electric car charging stations, single-stack draining systems and leakage-proof plumbing fittings – in line with the low-carbon lifestyle, he adds.
“Sustainable, eco-friendly houses that contribute to reducing the carbon footprint have become a priority for the market.”
Dubai’s luxury market has certainly been altered by the pandemic – whether we go back to work full-time or not. But while end users will continue to benefit when it comes to opportunity costs, investors may need to do a little more diligence before putting down cash.
Luxury property: Abu Dhabi outlook
“There is a limited supply of luxury properties in Abu Dhabi, especially the villa segment. Given the shortage of availability, and with the growth and investment in Abu Dhabi on the rise, we feel that the outlook is very positive. We’ve seen prices increase steadily over the last two years from a seven-year low in 2020, and we expect this trajectory to continue over the next three years,” says Andrew Covill, Director at estate agents Henry Wiltshire International.
Residential prices across the emirate rose 1.5 per cent in the year to March, with villa prices rising 1.1 per cent, according to property consultancy CBRE. The trend is in line with the strength of the wider market, and with a constricted pipeline – just 200 new units were delivered over the first quarter of 2022.
Through to December, another 9,588 units are set to be delivered, mostly in the Reem Island, Al Maryah Island and Al Raha Beach areas.