After a flood of wealthy investors rushed to the city when it emerged as a safe haven amid geopolitical and economic upheaval elsewhere, Dubai is now the world’s busiest luxury property market, trailing just New York, Los Angeles, and London. Dubai is one of the world’s most “cheap” luxury house markets, ranking 16th out of 20 worldwide premier residential markets according to Knight Frank.
According to property consultancy Knight Frank LLP, the Middle Eastern commercial hub sold 219 properties for $10 million or more last year. In comparison, New York had 244 transactions of $10 million or more, Los Angeles had 225, and London had 223. With 26 transactions, Dubai was also the seventh most active city for sales of $25 million or more.
Demand for Dubai real estate is increasing as a result of the government’s handling of the pandemic and its liberal visa laws, which are attracting more overseas purchasers. The emirate’s luxury real-estate market, which includes waterfront villas on the city’s man-made palm-shaped islands, is benefiting from an influx of wealthy investors, including Russians looking to protect their assets, crypto millionaires, bankers fleeing strict Covid restrictions in Asia, and wealthy Indians looking for second homes.
The Dubai real estate market is intense for several reasons, including:
- Booming economy: Dubai’s economy is rapidly growing, and the city has become a hub for business, trade, and tourism in the region. The strong economy has driven demand for real estate, particularly from foreign investors seeking to establish a foothold in the Middle East.
- Tax incentives: Dubai offers a range of tax incentives for real estate investors, including zero income tax, no property tax, and no capital gains tax. These incentives make Dubai an attractive destination for foreign investors looking to maximize their returns.
- Strategic location: Dubai’s strategic location between Europe, Asia, and Africa makes it an attractive hub for businesses and investors looking to access markets in these regions.
- Infrastructure: Dubai has invested heavily in infrastructure, including world-class transportation, communication, and technology systems. This infrastructure has made it easier for businesses and individuals to operate in the city and has increased demand for real estate.
- Lifestyle: Dubai is known for its luxurious lifestyle and high-end amenities, including luxury shopping, fine dining, and world-class entertainment. This lifestyle has attracted a wealthy and diverse population, further driving demand for real estate.
- Government support: The government of Dubai has been proactive in supporting the real estate market, including implementing regulations to protect investors and stimulating demand through policies such as visa reforms and residency programs.
- These factors, among others, have contributed to the intense and dynamic real estate market in Dubai.
The city is also becoming a popular location for hedge fund traders, who are drawn to it because of its ease of doing business, tax-free status, and attraction as a worldwide travel centre. According to Knight Frank, over one-third of the Middle East’s ultra-high-net-worth individuals will have increased their wealth by more than 10% by 2022. Russians were the largest international buyers of Dubai real estate last year, according to Better Homes, a Dubai-based brokerage. And the expansion shows no signs of abating. According to the consultant, the price of Dubai’s most expensive properties is likely to rise the highest globally this year — at around 13.5%, up from 44% last year.
