High-net-worth individuals (HNWIs) from around the world are predicted to spend $4.4 billion on real estate in Dubai this year, up 76% from the previous year, as the emirate’s demand for opulent residences from the world’s ultra-rich remains robust despite price increases.

According to a new report by the global property consultancy Knight Frank, HNWIs residing in the GCC are expected to spend $3.1 million on a house in Dubai, while the worldwide ultra-rich would spend an average of $36.5 million on real estate transactions.

For the study, Knight Straight conducted interviews with 317 wealthy individuals, whose ordinary net worth was $20 million around the world and $8 million in the Channel. “As one’s personal wealth rise, so does their interest in contributing in Dubai, among those worth over $15 million, interested in doing so peaks at 70%, though that of those with wealth between $2 and $5 million is 28%.”

Seventy-eight percent of respondents with a net worth of more than $15 million were also eager to buy a home in the emirate, and fifty-one percent of respondents with a net worth between $10 and $15 million stated they were “very interested” in doing so.

Among the best neighborhoods to buy in include Palm Jumeirah, Jumeirah Bay Island, Dubai Marina, Downtown Dubai, Business Bay, Dubai South/Expo City, Dubai Canal, and Dubai Hills Estate.

According to the poll results, ultra-rich purchasers intend to purchase a property in Dubai for capital gains or investment objectives, as well as to use it as a second or vacation residence or to rent out to tenants. As part of their plan to diversify their wealth, they also investing.

The government’s actions, such as extending the 10-year golden visa program and granting residency permits to remote workers and retirees, have contributed to the recent boom in the UAE property market.

The property market is also being supported by the UAE’s economy’s overall expansion because of economic diversification initiatives.

According to a survey released earlier this year by Knight Frank, sales of properties priced at $10 million or more than doubled to $7.6 billion last year, setting a record for Dubai’s luxury prime market, outperforming both London and New York.

1Due to the ongoing demand from abroad for upscale homes in the emirate, prices of properties in Dubai worth more than $10 million also increased last year at one of the quickest rates in the world, rising by 26%, according to Knight Frank.

According to Prathyusha Gurrapu, head of research and consulting at Cushman & Wakefield Core, the influx of high-net-worth individuals from around the world and the rise in the number of billionaires living in the United Arab Emirates are the main drivers of the growing demand for ultra-prime properties in Dubai.

Citing Henley’s Private Wealth Migration report, she stated, “Dubai ranked as the top destination for HNWI migration in 2022 and as the second destination in 2023.” “With 128,000 HNWI migrants anticipated this year, the global HNWI migration is predicted to increase by 5% from 2023, with a sizable chunk slated to go to Dubai. In addition to migration patterns, investors are increasingly buying ultra-prime houses as second residences.”

According to the most recent Knight Frank survey results, 25% of the questioned ultra-rich, defined as those with a net worth of more than $20 million, aim to spend $60 to $80 million on a single acquisition in Dubai, while 18% are committed to spending $40 to $60 million.

The study also revealed some intriguing details, such as the preference for ready-to-move-in homes over off-plan ones.

Just 14% of respondents were interested in the offline market, while 56% of respondents stated they wanted to buy completed or newly constructed real estate.

“For a market that has witnessed a great deal of new off-product debuts in the last 12 to 18 months, that has intriguing implications. When we consider that 56%, it once more suggests that people prefer to move in right away rather than wait to own a property, according to Mr. Durrani.

As the demand for real estate grows, developers are revealing new projects in the interim. The largest listed developer in Dubai, Emaar Properties, has unveiled a Dh55 billion ($15 billion) new building next to the Al Maktoum International Airport.

The business announced on Tuesday that The Heights Country Club & Wellness will have townhouses and semi-attached villas with features including a wellness center, parks, ponds, and greenways, among others.

The $35 billion plan to build a new airport is expected to ignite nearby development and lead to the creation of a new aerotropolis. “Most of the lots near the airport have already been sold,” Mr. Durrani stated.

According to Haider Tuaima, director and head of real estate research at ValuStrat, the demand for existing ready houses valued at more than Dh30 million has risen since 2022 and has been steady since last year, The National was told.

Off-plan sales represent new supply that has grown by up to five times since 2022 and is up 30% from the previous year. Nevertheless, this market still accounts for less than 1% of all Dubai house sales.

According to Knight Frank, prices of luxury residential properties in Dubai surged by 20% overall in the first quarter, with houses priced at $10 million seeing an increase of 18.2% year over year.

According to Knight Frank, total residential prices in Dubai are expected to increase by 3.5% in 2024, while elite properties will see a 5% increase.

“There does not appear to be any impending slowdown in the real estate market, based on all the individual KPIs that we are tracking on supply and demand, especially from overseas buyers,” Mr. Durrani stated.

Global HNWIs are anticipated to spend $408 million in Abu Dhabi this year on real estate, with an average budget of $3.4 million for HNWIs worldwide and $900,000 for wealthy inhabitants of the GCC.

With a net worth of above $15 million, 57% of respondents said they would be eager to purchase real estate in Abu Dhabi, where there is a growing demand from buyers for new buildings.

The largest real estate developer in Abu Dhabi, Aldar, has announced the opening of new projects in the city this year, including Nouran Living on Saadiyat Island. Along with the increased demand for wealthy real estate in the emirate, it also sold the priciest residence in the emirate for Dh137 million.

In Abu Dhabi, both the price and sales of real estate are rising.

According to Asteco, the UAE’s capital had a boost in sales transactions in the first quarter of 2024, with 2,660 sales of flats and villas, a 17% increase from the same time the previous year.

According to the report, average villa sales prices increased by 10% to 15% during the period, while average apartment sales prices across the market stayed mostly stable.

Planning to buy, rent or sell a property? Contact us at 800 HENRY or +971 56 484 3380 to get started

Source The National May 22 2024

 

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