The Dubai luxury property is experiencing a change in fortune. Global investors are once again renewing their interest in high-price prime properties in the area. With many high-end buyers finally purchasing some of the luxury properties built in the region, this could offer a solution to Dubai’s most prominent problem: oversupply.
More interest
Real estate agency Knight Frank’s annual wealth report places 85th in the top 100 cities for luxury real estate. This return to the top 100 is a great indicator for Dubai, who could finally be seeing its luxury property regain momentum.
The re-entry of wealthy investors into the real estate sector is undoubtedly a result of the still ‘soft’ pricing. As the market has more potential sellers than buyers, the price has been gradually falling over the past years. With more to gain for their money – as well as a sought-after location – Dubai is once again rising as an ideal location for global investment. As this continues, a better balance for buyers and sellers could return too.
This marks a change of luck for Dubai and sets the region on course to become an important location for a wide range of sectors. The investor interest is not just resonating in the luxury residential space, but even underpins growth in commercial assets such as industrial property. As more high-end investors move into the region, more investment into local businesses is also predicted.
A safe haven?
Liam Bailey, Global Head of Residential Research at Knight Frank, speaking at the release of the annual wealth report in March, states: “The luxury real estate investor base in Dubai is twice as diverse as in London or New York – that breadth of demand will provide some stability. There had been a number of property markets worldwide that had gone through a challenging period in the last couple of years. Dubai has had issues with pricing and we had seen the same thing happening in London.”
Whether this will provide the stability Bailey predicts for the area remains unclear. However, this positive step for Dubai hints at substantial progress for the region returning to pre-market crash strength.
A great deal for luxury
Global investors are seeing more results for their money in Dubai, compared with other leading locations, further pushing investment. In terms of prices, luxury is a relative bargain. According to Knight Frank’s wealth report, buyers in Dubai can expect to get more square footage per dollar. For example, someone with $1 million to spend will find that it can fetch him 138 square meters of luxury real estate in Dubai. The same in Monaco would only get 16 square meters, 22 square meters in Hong Kong, and 25 square meters in New York.
As Dubai continues to grow as a business sector and more companies are attracted to the region following Expo 2020, it will garner more interest into its property. This could go a long way towards solving the problem of oversupply in Dubai’s luxury property sector, helping to finally overcome the key issues troubling Dubai.
With good planning – and continued luck – Dubai can finally recover from its recent financial woes and progress once more.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.