Demand for UAE’s luxury properties will stay put in 2023
Since emerging from the sand dunes of the Arabian Desert some half a century ago, the UAE has become a global success story – and its real estate market highly sought after.
Thanks to extensive investment in world-class infrastructure and exceptional lifestyle amenities, the UAE is a tourism and trade hub. Its cities are consistently ranked among some of the best in the world in which to live. Coupled with politico-economic stability, the country has been attracting some of the world’s most talented entrepreneurs and skilled investors to its shores for many years.
In recent years, however, that demand has been rising. Recent legal and regulatory reforms in support of ease of doing business and changes to visa regulations have further opened the country to non-citizens. For example, with the introduction of the 10-year Golden Visa, the country is seeing more overseas investors flock to the UAE’s shores, particularly against the backdrop of mounting geopolitical uncertainty caused by the Ukraine-Russian war.
And the recent influx of tech companies in the region, which saw $2.87 billion worth of investments in MENA in 2021, is only likely to drive demand further.
Showcase their homes and preferences
Having proved itself to be a resilient market, demand for luxury property in the UAE is growing as it offers a haven to investors. Just this year, there has been an overall 15 per cent price increase in the ultra-luxury property segment, with 60 per cent of investment said to come from international sources, including Europeans (including British and French), South Americans, Indians, Chinese and Saudi Arabians. Research by our team at Berkshire Hathaway shows that 51 per cent of real estate professionals expect demand from overseas investors to increase further still.
With the rise in the number of HNWIs in the UAE, we are seeing growing demand for unique, one-of-a-kind products and experiences. In the real estate sector, this is translating to demand for bespoke properties. For example, many homeowners are searching for tailored solutions to showcase their collectibles – from shoes, cars, watches, and art.
Customize the ‘experience’
Wealthy individuals are also increasingly looking at the residence experience. For example, proximity to amenities, such as kindergartens and leisure areas, is particularly in demand, with almost 70 per cent of respondents in Dubai stating their importance to their property selection. We are also seeing the growing importance of health and wellness impact property preferences.
Outdoor space now is a number one priority, with ample garden and terrace spaces highly sought after, and even villas and farms outside of the city.
With the growing demand in the UAE’s ultra-luxury segment, prices are rising too. In the near future, we do not see any signs of prices letting up. With the UAE at the forefront of innovations globally and geographically located at its centre, the UAE’s real estate sector, thanks to its economic and political stability, continues to offer security against global trends such as inflation.
As the market gets more competitive, properties that cater to the changing desires of HNWIs will perform best.
