Dubai remains attractive to wealthy buyers despite rising cost of living: Report

The annual report analysed cost of living data across 25 major cities worldwide to produce a ranking based on the Julius Baer Lifestyle Index.

It showed that while prices are up 4 percent on average across goods and services, Dubai remains relatively affordable for high-net-worth individuals compared to other global cities.

Middle East’s wealthy most focused on luxury goods, Dubai property

Dubai took the 12^th spot in this year’s global ranking and 6^th position within the Europe, Middle East and Africa region.

This represents a slight decline from last year’s 7^th place globally but underscores Dubai’s ongoing competitiveness.

“Rebounding dramatically following Covid-19, growth in the tourism sector especially for Dubai, was strong, seeing an 11 percent increase year-on-year, with overnight visitors on track to exceed 20 million visitors in 2024, contributing about 12 percent to overall GDP. Dubai is also continuing to position itself as a new capital for global finance acting as a bridge between east and west with a traditional banking model as well as a digitally powered economy,” Fahd Abdullah, Executive Director of Investment Advisory at Julius Baer Middle East said.

The report noted real estate has grown substantially more expensive in Dubai, with property prices rising 16 percent in US dollar terms over the past year.

However, the sector remains popular with wealthy individuals from the Middle East region spending the most on luxury homes comparatively.

Over half of wealthy Gulf residents surveyed by Julius Baer declared spending more on residential property in the emirate.

The report said that sophisticated investors recognise the opportunity presented by Dubai’s property market. Given capital appreciation and relative affordability versus other global financial hubs, it represents a smart investment.

“This growing trend will keep Dubai on the global investor’s radar. More than half of wealthy Middle Easterners in our survey said they had spent more on residential property in the past 12 months, and planned spending is equally high, with 58 percent saying they will spend more in the coming 12 months. No other region comes even close to this,” the report added.

A further 58 percent intend to boost such expenditures going forward, the highest of any location covered.

Low taxes combined with economic and political stability make Dubai an attractive base for families and entrepreneurs, the report said, adding that its strategic location has additionally aided the city’s emergence as a premier business gateway between East and West.

Consumption patterns among high-net-worth individuals shed further light on Dubai’s value proposition.

Smartphones, designer clothing, shoes account for largest expenses

According to the Lifestyle Survey component of the report, luxury goods like designer smartphones, designer clothing, shoes, watches and handbags accounted for the largest expenditures.

The report also found business and leisure travel within the broader Middle East region increased substantially over the last year.

Moreover, the research highlighted high-net-worth individuals in the Middle East displaying a more risk-tolerant investment approach and bullish outlook overall.

“The Middle East led by the GCC countries should continue to enjoy surpluses on the fiscal and current accounts in the interim. Inflation, albeit higher than before, is still among the lowest in the emerging markets,” Abdullah said.

Going forward, Dubai seems well positioned to retain its status as the wealthiest city in the Gulf and core attraction for wealthy regional residents seeking a combination of opportunities, comforts and advantages according to the latest Global Wealth and Lifestyle Report.