Strong growth within Dubai’s luxury property segment

The year 2021 was an extraordinary one for Dubai’s real estate market. The shifts, which were set in motion due to the pandemic, realigned priorities towards home, family, health and wellness. These profound lifestyle changes, combined with other factors, such as increasing numbers of people working from home, have led to a luxury real estate boom and a migration of wealth to new markets.

By the end of 2021, there was a 17 per cent increase in prices citywide across the entire market. In 2021, we witnessed a plethora of buyers for luxury villas and penthouses who demanded better quality properties, and bigger layouts and sizes. Transactions in certain luxury areas such as Palm Jumeirah and Emirates Hills have soared, with some incredible properties sold in 2021.

Owing to the strong demand in the luxury segment, the inventory is low. Many major developers are striving to bridge this gap in inventory by planning luxury property launches in 2022. We expect positive, but moderate growth in 2022, with a single digit growth in prices in luxury market. Buyers, though, will have to adjust to the high asking prices.

The types of luxury properties in demand include:

WATERFRONT PROPERTIES
The pandemic, lockdown and social restrictions elevated the need and value of a good home. A strong shift in preference towards waterfront properties has been observed since 2020. In Dubai, the demand for spacious beachfront villas for sale and rent was also high the last year.

PROPERTIES AFFILIATED WITH LUXURY HOTEL BRANDS
The hotel apartment model prevalent in popular resort destinations has allowed buyers to earn income when they’re away by placing their property into a rental pool managed by a hotel. This has recently given rise to new developments of apartments and townhomes, creating affiliations to gain access to five-star services and amenities offered by a luxury hotel, but without the necessity of being managed or rented.

Luxury residences are associating with brands such as The Address, Dorchester Collection, Fair-mont, Four Seasons, Ritz-Carlton and Rosewood. These models have also become widespread throughout Asia, Middle East and North America.

RESIDENCES WITH FAMILY-FRIENDLY FEATURES
New luxury residences under construction reflect that buyers are being more flexible on size than they are on amenities. In luxury communities, amenities such jogging and bicycle tracks, tennis courts, retail, health and wellness facilities, recreational areas and concierge services are expected.

FOCUS ON WELLNESS
Luxury homebuyers view the place where they live as playing a critical role in promoting their overall sense of wellness. Spas, pools and gyms are becoming ubiquitous, but the modern concept of wellness encompasses far more than exercise and fitness to include a broad array of holistic health and environmental concerns.

Ayman Youssef is the vice president of Coldwell Banker UAE

Taken from Property Finder’s Prestige special report in Gulf Business’ March issue