As I was sitting down to write this blog, there was a ping on my desktop – news of another record-breaking luxury property sale in Dubai. They seem to be coming through thick and fast lately, and it’s certainly a reflection of a booming market.
While other luxury markets are suffering from the effects of the sharp hike in interest rates – with reports suggesting an ongoing contraction in global luxury property hotspots, Dubai proudly remains top of global property firm Knight Frank’s Prime Global Cities Index (PGCI), which tracks prices in 46 leading prime markets worldwide.
The latest figures in the PGCI “highlight Dubai’s exceptional market transformation,” with Knight Frank recording a whopping 44% annual price growth in Dubai.
While two-thirds of markets are still seeing positive growth according to the last quarter’s PGCI figures, the large price declines in the weakest global markets have made the overall index negative for the first time since the global financial crisis.
At the top of the table, Dubai’s 44% annual growth is an outlier, with second place Miami the only other city to reach double-digit growth (11%). Zurich (9.4%), Berlin (5.7%) and Singapore (5.5%) complete the top five markets –highlighting the resilience of wealth and, in Berlin’s case, investment hubs, according to Knight Frank, which also revealed that Dubai witnessed 219 sales of properties worth US$10 million or more last year.
While global markets are generally seeing a downturn in prices, buyers and sales, the luxury market is always more buoyant than average property sales.
There’s no shortage of investors and HNWIs looking for the ultimate property, and in a high-interest market, cash is king. Affluent investors are not dependent on debt to make a property investment.
And luxury remains resilient in the face of market downturns. Add in Dubai’s luxury property pool, its favourable tax regime, ease of gaining a residence visa and relative value for property compared to other markets, and we see why the city’s luxury property sector is flying high.
Analysts say Dubai is now the world’s busiest luxury property market behind New York, Los Angeles and London, citing a flood of HNWIs hitting the city because of its reputation as a safe haven amidst all the geopolitical and economic uncertainty we are seeing elsewhere in the world.
Of course, we have witnessed an exodus of capital from CIS countries, with buyers keen to take their wealth out of unstable environments and into strong, stable economies like Dubai.
Dubai has also always prided itself on welcoming people of all nationalities.
Dubai’s immigration policy is designed to attract a diverse range of skilled professionals, investors, entrepreneurs, and tourists. The policy focuses on facilitating business, tourism and employment opportunities – and in short, it’s easy to move to the UAE if you are buying a property or investing.
A notable growth in branded residences has also contributed to Dubai’s association with luxury lifestyles. There are now more than 50 branded projects in Dubai, ready to be delivered in two to three years.
Compared to other markets, Dubai’s branded property market delivers next-level luxury. I’m seeing more and more luxury hotel-level experiences, facilities and properties bursting with designer furnishings.
It goes without saying the continuing – and seemingly growing – interest in luxury property here in Dubai is fantastic to see. Luxury property buyers bring their wealth with them and their expectations for the trappings of upmarket lifestyles – which benefits the economy, creates opportunities and jobs and improves the environment for everyone.
There doesn’t seem to be any let up in demand for luxury properties in Dubai.
And, of course, Dubai’s luxury real estate market is not immune to the normal cycles of supply and demand fluctuations. External factors such as global economic conditions, geopolitical events, and changes in investor sentiment can impact market dynamics – but right now, the city seems to be the place to be for savvy luxury real estate investors.
While other markets have attractive offerings, Dubai has created a perfect environment in terms of desirability, stability, investment potential, ease of purchase and quality.