Despite Dubai real estate prices increasing in value by double digits last year, luxury property in the city is still “undervalued”, according to a real estate boss.
Chris Whitehead, managing partner at Dubai Sotheby’s International Realty said that for the past two or three years post-Covid lockdowns, high-net-worth buyers have been flocking from European countries such as the UK, France, and Germany to relocate to Dubai.
Investors are now looking to stay in the UAE longer term and prices are better value compared to other prime real estate markets he said.
Dubai luxury real estate
According to the 2024 Sotheby’s International Realty Luxury Outlook Report, Dubai saw record-breaking sale prices throughout 2023, with super-luxury residences selling for up to $4,000 (AED14,690) per square foot, marking consecutive year-over-year increases since 2020.
The move is, in part, to benefit from a lack of real estate tax and this has seen prices skyrocket.
Also in 2023, a megamansion in the city’s Emirates Hill neighbourhood listed for a record-breaking $204m (AED749.3m) with Sotheby’s International Realty.
Whitehead said: “Buyers are coming for the property quality, the value for the money, the cleanliness, and the retail. Dubai was always transient; people came to make money and then left to go back to where they came from. But now, many are moving for the lifestyle and staying”.
In 2023, average residential prices in the city rose 16.9 per cent in the first two quarters, according to CBRE’s UAE Real Estate Market Review, with average apartment prices increasing by 17.2 per cent and average villa prices by 15.1 per cent.
Transaction volume for the year to June 2023 also increased by 42.3 per cent year over year during the second quarter of 2023.
Chris Whitehead said: “There is a shortage of luxury property in Dubai, but in the last three years, the market has started to introduce many luxury products that are currently under development”.
Branded, service residences are particularly popular at the moment.
Chris Whitehead said: “The ultra-high-net-worth buyers want service and confidence in a recognisable brand name. We just launched the Baccarat Residences in Dubai, which has been extremely successful.”
The Baccarat Residences offer two-to-five-bedroom apartments and penthouses beginning at $4.9m (AED18m).
“Many of the world’s most renowned architects and designers want to put their name in Dubai right now,” Whitehead says. “The current flavour of design is very contemporary, very L.A. and Miami, with lots of white, glass, and black framing.”
The struggle is in finding prime land in the city. “Buyers want the beach lifestyle, not necessarily the city, and the reduced land bank is also pushing the price market up,” he said.
Buyers are looking for individuality and customisation, as well as turnkey properties.
“They don’t want to come in and build. They can afford to pay to put down their bags and start living,” Chris Whitehead said.
And those same high-end buyers are finding relative deals. “Dubai is already very undervalued for trophy-asset properties,” said Whitehead.
“Buyers are paying two to three times the price per square foot in London, and Dubai is tax-free. The ultra-high-net-worth individuals of Dubai spend the winter here and the summer in Europe.”
The future of super-luxury properties in Dubai is positive, according to Whitehead.
“There isn’t any sign of slowdown. Supply is short, demand is high, and Dubai isn’t a transitional market anymore. Buyers are coming to stay, and that’s why the market is maturing.”
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