Influx of global millionaires driving up Dubai's housing market boom
Buyers with net worth of $30mln have been snapping up homes since 2020
Dubai skyline. Image used for illustrative purpose.
By Cleofe Maceda, ZAWYA
A huge influx of millionaires in Dubai has contributed to the recent housing market boom in the emirate, with several ultra-high-net-worth individuals (UHNWIs) acquiring $8 million-plus homes since 2020, according to Luxhabitat Sotheby’s.
So far this year, the high-end brokerage firm’s wealthy clients snapped up 30 residential units, each worth at least 30 million dirhams. At least three buyers with more millions of dollars to spare have also closed deals on ultra-luxury properties worth 100 million dirhams in 2021.
In 2020, when the COVID-19 pandemic led to a rise in working from home and private space became more valuable, at least 31 residential properties in the same price category also changed hands.
The volume of prime property transactions recorded in Dubai in 2020 and 2021 are believed to be higher compared to the previous years, before the coronavirus struck. In some highly sought-after locations, 80 percent of the homes sold through Luxhabitat Sotheby's carried price tags exceeding 30 million dirhams.
“The average value of the transaction has gone up in comparison to the last couple of years due to many UHNWIs moving to Dubai with net worth of above $30 million,” Rohal Kohyar, Marketing Director at Luxhabitat Sotheby’s International Realty, told Zawya.
Some of these mega deals were closed by clients that have been on the Forbes’ billionaire list. With the robust demand, he added, Luxhabitat Sotheby’s business has gone up by 300 percent.
Dubai has been seeing a growing number of millionaires moving to the emirate over the past several months.
According to research firm New World Wealth, which tracks the wealth and the movements of millionaires, multi-millionaires and billionaires globally, about 2,000 high-net-worth individuals (HNWIs) moved to Dubai during the first six months of 2021. As of June 2021, Dubai is home to 54,000 HNWIs, up by 3.8 percent from 52,000 last December.
Where the millionaires are buying
With the huge demand, prices per square foot in the ultra-luxury category have gone up by 17.68 percent as of the second quarter this year.
Overall, Dubai’s prime residential market saw 4,827 apartments and 506 villas sold in the third quarter of this year, according to Luxhabitat Sotheby’s, based on data from the Dubai Land Department.
These properties are located in popular developments like Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Business Bay, Emirates Living, Jumeirah, Jumeirah Beach Residence, Mohammed bin Rashid City, Jumeirah Golf Estates, Jumeirah Islands, Jumeirah Lakes Towers and Palm Jumeirah.
The most sought-after locations for buyers so far is Palm Jumeirah, which clocked in a total of 3.9 billion dirhams in sales for the quarter, followed by Downtown Dubai (2.29 billion dirhams) and Business Bay (2.07 billion dirhams).
Prime properties in Business Bay showed the highest growth of sales in the luxury category, at 2.29 billion dirhams, up from 941 million dirhams in the previous quarter. Jumeirah Beach Residences also recorded 1.4 billion in sales, up 1.5 times, while Arabian Ranches sold homes worth 283 million dirhams, up 1.1 times.
“Some of our top-billing areas have seen three times the number of deals versus the previous quarter, with 80 percent of the transactions worth an average of 30 million dirhams,” said George Azar, CEO and chairman of Luxhabitat Sotheby’s.
Demand for properties in Dubai picked up in the wake of the COVID-19 lockdown last year. This has led to an increase in prices.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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