It seems you can’t go far without hearing and seeing the wealth that’s entered into the Dubai market over the past 12 months. As a city that’s always affiliated to the rich and famous, it feels we’ve gone up another level over the past year.
A growing concentration of high net worth individuals within Dubai has driven huge demand for luxury real estate, altering the supply and demand balance. However, there is one trend in particular superheading demand in this end of the market: branded residences. A definite one to watch out for and here’s why.
There’s a reason we all have brands we love. Whether it be for a watch, a car, a hotel or a handbag. We know the value of the brand. We see the attention to detail. We hold so much weight of expectation in brands we love. So combine this with the single biggest purchase one makes in their lifetime- a home – you can see why it’s the ultimate combination.
Dubai’s luxury market
When looking at the Dubai luxury market over the past 12-24 months, the appetite is evidently far higher for branded residences vs non-branded luxury residences. With branded residences, offering resort-like features including residence clubs, room service, cinemas and private mooring options, such projects become hard to contend with. These projects go far beyond luxury as they focus on every minute detail to provide residents with the ultimate luxury lifestyle.
However, not any brand will do. We’ve noticed buyers holding some brands in much higher regard than others. Hotel-branded residences are coming out on top, with buyers already knowing what level of service to expect from the brand. These are 6-star resorts they’ve vacationed in with their families over the summer, travelled halfway across the world to stay in and have lived and breathed the experience.
Hence when it comes to buying a branded residence, they understand the level of quality they’re buying into, which is why we’ve seen so much success in recent project sales for residences such as St Regis Financial Road, Four Seasons and Bulgari Residences at Jumeirah Bay. It’s not just on the emotional side, but financial too. Branded residences are offering more of a premium post-handover.
When looking at transaction prices pre and post-handover, there is a notable difference in how much more they transact. Take Address JBR for example – upon handover, units were selling at a 30-40 percent premium and similar trends are also appearing in projects such at W Residences Downtown with investors making solid returns, even before handover.
Combine this style of living with waterfront proximity, and developers could be onto a winner. With Europeans making up a large share of luxury buyers, water view takes high precedence, and developers are listening.
We’re finding developers situate their branded residences on the water and sell out with high price tags and at an incredibly fast rate. The good news is that any waterfront meets the requirements, not just sea views. This has allowed developers to get creative with project location as seen by Ritz Carlton Creekside along the creek and the Four Seasons Residences building on the Dubai Canal.
When looking at buyer requirements for luxury real estate, in recent months, there’s been a shift. Many buyers are now looking to invest into Dubai for their primary residence, as opposed to simply purchasing a second home. 12 months ago, the norm was foreign buyers investing into Dubai for their second homes, whereas now, buyers in this market are searching for their new permanent residence.
The trend has shifted with many choosing to uproot their families and make the move to Dubai permanently. Spurred on by the economic situation across Europe and Russia, Dubai is rising as a strong option for Germans, French, Swiss and Russian. In addition to the endless initiatives Dubai has introduced to make it an attractive destination for anyone to reside, the innovations and real estate projects available to high net worth individuals make it an even easier transition.
Although many Dubai residents have felt some pain in price increases over the past 18 months, whether that be in the rent or sales market, one thing that remains in our favour is how we compare on a global scale.
For branded residences over $30 million, Dubai averages $1,700 blended across off-plan and ready market units. Compared to New York or London, the average price per square foot for these units comes in at over $2,000, showing further signs that Dubai offers great value for money to many buyers looking to purchase.
One thing that’s for certain – individuals are not just buying into these brands, they’re buying into the Dubai brand. Dubai’s vision, Dubai’s potential, Dubai’s ambition. Once you’ve been in this city, had a taste of it yourself and lived and breathed it, it’s hard not to get drawn in. Considering the variety of branded residences too, the pull only gets stronger (and of course, with good reason!)
Besides, most of us came here with a 2 year plan and remain a decade later.
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