Shaping the Future of Dubai's Luxury Real Estate Market: Trends, Opportunities, and Projections

The Dubai real estate market has seen a significant shift in demand since the outbreak of Covid-19. The pandemic has resulted in a new demand for ultra-luxury properties, waterfront properties, luxury offices, villas, and townhouses. However, before the pandemic, developers in Dubai did not focus on these segments, except for Dubai Harbour, which brought several luxury waterfront projects.

As a result, there was a supply shortage in the market, and high demand coupled with low supply pushed prices up rapidly. To address this, Dubai developers have started developing properties catering to this new demand. These projects are still under construction, and we can expect the first wave of handovers to begin in Q2 2024. With the current situation in the market, prices for luxury homes, villas, luxury offices, and waterfront properties are expected to continue to grow steadily or at least remain stable for the next three years. It is worth noting that most luxury home buyers are end-users who have strong financial holding power and a long-term view. They recognize that luxury properties in Dubai are still undervalued, not just on a global scale but also in terms of the high living standards they offer at reasonable prices. It's also worth mentioning that this segment is likely to have more sustainable demand than other segments.

According to our records of sales transactions over 95% of buyers for this segment do not use mortgages to acquire luxury properties. Means it is certainly far less sensitive to the hike of interest rates. If you're considering investing in the Dubai real estate market, it's essential to look for areas and locations that offer limited supply of projects when viewed from an overall market perspective. For apartments, prime waterfront projects, especially those with direct beach access, like Emaar beachfront, and low-rise modern and low-density communities like Citywalk and Design District are good options to consider. For villas and townhouses, look for properties that have convenient access to CBDs and luxury villas that are very centralized and limited in supply, such as Al Wasl Downtown Villas and District One.

In conclusion, with high demand and moderate supply, the Dubai real estate market is poised for sustainable growth, and investors who make strategic investments in this market can expect long-term returns.