Dubai Developers Are Wise In Not Flooding The Market With High-End Residences.
In 2023, will the city’s luxury property market post another record-breaking year of growth? With the most recent Omniyat releases (with Orla, prices from Dh25 million). Life’s MAG (a limited edition of Ritz-Carlton residences at Dh177 million). Binghatti (with the world’s tallest residential tower in the works having apartments starting from Dh8 million), developers certainly appear to believe as much.
A 5-bedroom villa on Palm was sold by Alpago Properties for Dh130 million during the same period. The company announced, “More signature villas will go on the market in the coming months.” A house on Palm’s Billionaires’ Row is now part of Alpago’s portfolio and sold for Dh302.5 million.
There is sufficient evidence to conclude that 2023 has great promise for the luxury real estate market in Dubai. According to Faisal Durrani, from Knight Frank’s Middle Eastern operations, “Prime values are being fueled by Dubai’s safe-haven status, an exceptionally diverse range of international ultra-high-net-worth individuals in search of (their) second luxury homes. Combined of course with the government’s world-leading response to the pandemic, which has spurred business confidence.”
“One of the most “affordable” luxury property markets in the world is Dubai. With prime homes selling for around $800 per square foot. Which adds to the appeal. Overall, residential prices are down 21.4% from 2014’s peak levels.
Dubai offers them more for the same money as a New York or London property. That is now becoming another attraction for wealthy home purchasers. It is also likely the reason why Omniyat’s recently opened Orla on the Palm. Which features a 50,000-square foot. A three-level penthouse (price to be announced soon), and a mansion near the beach, have a waiting list.
Don’t Oversupply the Market
Additionally, developers are being very clever. All of the most recent launches of luxury apartments have been of the limited edition variety. Giving investors the assurance of carefully supervised project completions. The Arada Company, based in Sharjah, did the same thing when it unveiled its first project in Dubai, at Jumeirah Golf Estates. In addition, will do the same thing again early in the following year with a signature development on the Palm.
A clear demand-supply imbalance as well as a positive economic backdrop, support our 2023 prime residential forecast of 13.5%. “Developers have not responded to the buoyancy in demand as we have seen in previous cycles. And with supply remaining limited and demand for luxury waterfront continuing to strengthen,” he said. In fact, one of the fastest growing economies in the world is predicted for the UAE in 2022. Homeowners and investors will both gain confidence from a return to steady and sustained growth.
MAG of Life’s Dh177 million is “branded” Demand for branded residences in Dubai has been on the rise all year. And Ritz-Carlton mansions represent a continuation of that trend. This year, a penthouse at the Atlantis the Royal apartments sold for Dh163 million, making it the most expensive penthouse sale in Dubai to date. (In addition, which, given some of the recently released options on the market, may soon be put to the test.)
Branded homes are currently in high demand, particularly on the Palm Jumeirah, according to Advisor at LuxuryProperty.com. “Buyers are seeking upscale homes that offer the status of an established luxury brand.
“A lot of the most recent branded projects, including Orla and Ava (both managed by Dorchester Collection), have already sold. As buyers scrambled to reserve their apartments while they could. There is also a very small supply in projects. That are currently handing over or that will hand over soon, like Atlantis the Royal Residences. Because the majority of the units have already been sold. Sales of luxury real estate in Dubai ought to continue cruising along in 2023 with that and more than enough.
How Are The ‘Prime Properties’ Of The World Faring?
According to Knight Frank, premium price growth in 25 cities under study will probably be 2% on average in 2023. Down from the expected 2.7% growth six months ago. Although this is the case, “aggregate growth in 2023 would still be larger than that seen in six of the prior 10 years”.
“Geopolitics is getting more complicated, money is getting more expensive, and China is no longer the world’s economic engine. The unpredictable effects of skyrocketing inflation, the rising cost of debt. Moreover, higher taxes are issues that homeowners must deal with. Prime markets are more resistant to the effects of higher mortgage rates, but they are not exempt.” Some of the world’s most renowned cities, particularly those in the US, have already seen a decline in the cost of luxury homes.