Dubai: Luxury property set to double its market share in 2022

Dubai's luxury property market will continue to rise in the second half of the year as limited stock of prime and ultra-prime residential units are unable to cater to the rising demand from both end-users and foreign buyers, experts say.

Industry specialists, analysts and market experts said the demand for prime and ultra-prime properties in Dubai is on the rise since the beginning of the year as high net worth individuals (HNWIs), millionaires and entrepreneurs looking to relocate or buy a secondary home in Dubai.

Referring to the recent report, they said 4,000 HNWIs are expected to relocate to the UAE this year as the country demonstrated its ability in managing the Covid-19 pandemic, successfully hosting Expo 2020 Dubai, offering excellent connectivity and 100 per cent foreign ownership of companies and introducing range of visa reforms.

They further said the Russia-Ukraine conflict is also drawing liquidity and investments into Dubai from the affected regions.

Luxury a resilient segment

Prathyusha Gurrapu, head of Research and Advisory at real estate consultancy Core, said the prime and ultra-prime residential market has been relatively resilient compared to the affordable and mid-market segment during 2014-2020.

"We have observed a marked increase in demand for prime residential properties since fourth quarter of 2020. In fact, 2021 saw the highest secondary market transactions above Dh10 million in the last decade, with Palm Jumeirah accounting for nearly 35 per cent of these transactions," Gurrapu said.

"This trend of robust demand for prime residential continues in the first quarter of 2022, with prime transaction volumes above Dh10 million being 140.2 per cent higher than the same quarter of 2021," she said.

Elaborating, she said about 483 deals above Dh10 million were signed during the January-March quarter this year compared to 201 in the same quarter last year.

"Villa transactions exceeded apartments as 305 villas and 178 apartments were sold in first quarter of 2022 compared to 150 villas and 51 apartments in the same quarter last year as the demand for the luxury market is stemming from both end-users and overseas investors," Gurrapu told Khaleej Times.

While prime residential prices are well near 2014 prices, many buyers are largely agnostic to historical pricing and find Dubai prime waterfront property to be competitively priced compared to most global cities, according to Core'sfirst-quarter report.

Tight supply for luxury properties

With very high transaction volumes compared to previous years and the ready stock in this segment taken up by HNWIs, the lack of inventory in the secondary market has pushed more interest toward the prime off-plan market. Recent launches in the high-end market are reflecting this trend and have seen strong absorption, it added.

"As luxury properties are dominating the real estate sector, they will attempt to leverage the situation. This will play a positive role in sustaining the demand for luxury properties while benefiting the overall property market," he said.