The luxury real estate boom continues

Walid Al Zarouni

02 April 2024

The demand for luxury real estate in Dubai has been gaining rapid momentum since the beginning of this year, with new record sales deals for luxury residential homes recorded, most of which were concentrated in the main residential neighborhoods in Dubai, such as The World Islands, Palm Jumeirah, Dubai Water Canal, Business Bay, Marsa Al Arab, Burj Khalifa, and Dubai Marina. .

The emirate overtook famous international cities, such as London, New York, and Singapore last year, after witnessing a huge boom in demand, amid the multiplicity of options that the market provides to billionaires and wealthy people from all over the world.

The peak of the luxury market was confirmed by apartment sales, as the value of a residential unit in Manarat “Bulgari” reached 420 million dirhams, while a specially designed palace on Palm Jumeirah was sold for 600 million, and the market also witnessed the sale of a penthouse in “Como Residences” on Palm Jumeirah for a price It is the highest ever at half a billion dirhams, which has strengthened Dubai's position as the best global market for luxury real estate.

Regarding expectations for the year 2024, the luxury real estate scene in Dubai is preparing for further development with the introduction of new icons and the launch of residential towers in the heart of Dubai from major real estate developers, in an attempt to accommodate the large demand from the wealthy.

Even if any billionaire investor exits, market dynamics dictate that the asset is likely to pass to another individual of similar financial standing.

Studies indicate that the investment outlook in major cities that attract luxury asset investors reveals a consistent trend: once a city is established as a destination for billionaires, it tends to retain this status indefinitely, regardless of global or local market shifts.

In another context, a continuous increase in prices is not expected within the luxury real estate sector, as it is expected that there will be a constant and stable number of sales transactions, especially in off-plan sales. Ultimately, the true measure of sustainability for any sector of the real estate market will be when the properties are completed, as they must stand up to actual scrutiny then.

Upon closer examination of the fundamentals of the small market within luxury real estate in Dubai, there is a strong tendency to view it as a market driven by real demand rather than speculative activity. It is worth noting that investing in real estate worth more than 15 million dirhams, especially those worth up to half a billion dirhams, is not usually considered speculation. Dubai has emerged as a consistent destination for these individuals to invest in premium assets, thereby shifting market share from traditionally recognized safe havens such as London, New York and Paris.

*Chairman of the Board of Directors of “W Capital Real Estate Brokerage Company”