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The world’s richest have always been interested in acquiring real estate in Dubai. With the prices continuing to decline, the trend is now even more conspicuous: last year, the volume of transactions for the overall prime market jumped by 22 percent compared to 2018.
In 2019, luxury apartment and villa purchases in Dubai amounted to 42.3 billion UAE dirhams, up from 34.4 billion UAE dirhams in 2018, according to Luxhabitat.
Premium buyers from the UAE and abroad snapped up a total of 1,454 villas and 16,522 apartments that cost an average of 4.3 million UAE dirhams each last year.
According to Alexander von Sayn-Wittgenstein, luxury sales director at Luxhabitat, the reduction in sale prices has encouraged more high-net-worth buyers to invest in Dubai’s prime real estate, adding that there’s a noticeable interest from buyers in India, United Kingdom (UK) and Saudi Arabia. At the same time, the downtrend has also seen many residents shift to premium locations.
“The decrease in prices has motivated people who were living in less prestigious areas before to reconsider their decisions and upgrade,” Sayn-Wittgenstein said.
Where are the HNWIs buying?
Dubai attracts considerable interest from global high-net-worth individuals (HNWIs), as it offers a lot of luxury options particularly in communities like Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Emirates Hills, Jumeirah, Jumeirah Beach Residence, The Lakes, Meadows and Palm Jumeirah, among others.
Prime residential villas, popular among buyers who want to have their private pool and garden, usually cost 8.7 million UAE dirhams.
However, today’s luxury homes in Dubai are a lot more affordable than they were about five years ago, when prices started falling.
According to Luxhabitat, the average price per square foot in the overall prime residential market went down by 3.72 percent last year. Currently, the average price per square foot in the overall prime market for villas is 1,348 UAE dirhams and for apartments is 1,376 UAE dirhams.
Dubai’s home price decline that started in 2014 has been partly blamed on a huge supply glut. To address the imbalance in the supply and demand of housing units, the Higher Real Estate Planning Committee, which is tasked to regulate and control the pace of property projects, as well as “assess the state of the real estate sector” and “study the needs of the market.”
Top 3 destinations for luxury buyers
As of last year, most luxury home buyers snapped up properties in Mohammed bin Rashid City, where transactions totalled 8 billion UAE dirhams.
Downtown Dubai, home to the world’s tallest tower, emerged as the second-most popular area, with total sales reaching 7.9 billion UAE dirhams.
Emaar Properties’ Dubai Creek Harbour, where the world’s next tallest tower is currently under construction, was the third-most favourite among high-end buyers, with sales reaching 4.2 billion UAE dirhams.
Other locations that also received a higher volume of sales were Dubai Harbour & Bluewaters Island, Jumeirah Lakes Towers, Jumeirah Golf Estates and the Palm Jumeirah.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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