The share of international buyers in Dubai’s most sought after luxury housing segment is projected to see a sharp rise in 2023, led by wealthy Chinese investors in the wake of lifting of Covid-related restrictions in their country, a latest market study said.
European investors are also expected to increase their investments in the emirate’s high-end housing property assets this year due to high inflation rates in their home countries.
The uptick in the influx of fresh international investors is predicted to lead to a 14 percent jump in the emirate’s luxury property segment this year, according to the study by Realiste, the Dubai-based proptech which develops AI-powered products for real estate investment.
High-net-worth Russians were the top buyers in Dubai’s high-end real estate sector in 2022 due to the Russian-Ukrainian crisis.
“The luxury [property] sector in Dubai will see a projected growth of almost 14 percent throughout the year,” Realiste said.
The emirate’s luxury real estate segment has been cashing in on the global slowdown, with the likes of Indian billionaire businessman Mukesh Ambani reportedly forking out $163 million for a property in the city’s artificial tree-shaped island of Palm Jumeirah late last year.
“We are very optimistic about Dubai’s growth [in the luxury property segment] in 2023,” Alex Galtsev, co-founder of Realiste, told Arabian Business.
“We believe it will be the best year for Dubai’s property market due to many factors like a growing population, a brain drain from the Commonwealth of Independent States (CIS), and capital inflow from European and Asian countries,” Galtsev said.
Dubai’s sought after areas
Some of the most sought-after residential areas such as Downtown Dubai and Palm Jumeirah are expected to grow by 7 percent in value in 2023, followed by Dubai Marina by 6 percent, Jumeirah Bay by 5 percent, and Bluewaters by 2 percent, the study projected.
Splashy housing properties in Bluewaters are currently rated among the most expensive ones in the emirate, with average prices estimated at $20 million, commanding an average per square foot price of $10,319, according to the Reasliste study.
Compared to this, upscale housing properties in Jumeirah Bay and Downtown Dubai are less expensive at $7 million and $3.2 million on average, respectively.
Factors behind the growth
Realiste said the primary factor for the rising international investor interest in the emirate’s upscale property assets is its safe-haven status.
“It will increase the share of international buyers in the local property market in 2023,” it said.
Another contributing factor to the emirate’s growth is its relatively low prices in the luxury sector, as compared to other global financial hubs such as Singapore.
“Currently, prime properties in Dubai are selling for around $800 per square foot, making it one of the more affordable luxury residential markets in the world,” the study pointed out.
Along with the relatively lower prices, limited supply of prime houses in the city also contributes to its growing prices.
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