Dubai's real estate market is surging, driven predominantly by the increasing demand for ultra-luxury homes. Recent developments showcase homes priced between $60 million to over $120 million, drawing the attention of millionaires from Europe, Asia, and the Americas as luxury becomes synonymous with the city's allure.
These new residences are more than just mansions; they come equipped with features such as private cinemas, swimming pools, spas, and even personal elevators. The extravagance is reaching new heights, surpassing even Dubai's already opulent standards. For example, one developer dedicated thousands of miles to transport a massive glass wall, allowing the homeowner to frame their ideal sea view. Meanwhile, others are constructing penthouses with private lobbies and elevators straddling two towers.
Mark Phoenix, CEO of Sankari Properties, stated, "The upper end of the market is the most profitable. If done properly, a developer can sell for the maximum sort of prices." This statement encapsulates the strategies of builders as they ramp up efforts to capitalize on this booming segment.
Interestingly, this phenomenon is occurring against the backdrop of moderations across Dubai's broader real estate sector, which had experienced price surges since 2021. Knight Frank reports on last year's sales, indicating Dubai surpassed notable markets such as New York and Hong Kong with 435 homes sold at prices over $10 million.
Further projections from property researchers suggest prices for ultra-luxury homes will jump by at least another 5% throughout 2024, following a remarkable increase of around 67% since 2021. Mahdi Amjad, founder of Omniyat, highlighted the unmatched value offered by Dubai’s real estate, saying, "We benchmark our buildings against buildings in New York, and we find... you get by far more space and by far more experiences and amenities."
The competition among developers is fierce, with many forced to go to extraordinary lengths to differentiate their offerings. One site being built showcased the inclusion of retractable glass domes intended for pools and spas, adaptable for sunbathing or events alike. Such ideas not only exemplify luxury but also speak to the wishes of the city’s affluent clientele, whose desires often know no bounds.
Many developments are taking place on Dubai's artificial islands, highly coveted for their exclusivity and luxury. For those seeking ultra-luxury living, mansions on Billionaire Island boast private beaches and innovative car-parking systems, among other luxuries. The demand signifies the UAE's appeal to wealthy families seeking second and third homes, particularly appealing due to competitive pricing compared to other major global cities.
According to Henley & Partners, around 6,700 millionaires flocked to the UAE last year, establishing the region as the world's top destination for affluent individuals. Yet, developing ultra-luxury properties is not without its challenges. Adding extravagant amenities inflates upfront construction costs, which can be intimidating for some developers.
Wissam Damaa, founder of Palace Group, highlighted one ambitious project where he had to meet the demands of a client who required a singular glass wall measuring 17 by 4 meters for their living room. The sourcing process was not straightforward and required coordination between manufacturers spanning multiple countries. Damaa stated, "Most of our clients have multiple homes... and they’re very specific about what they like and what they expect."
While there remains high energy around the market, trends suggest some moderation is expected. According to Honey Deylami, executive partner at Dubai Sotheby’s International Realty, wealthy buyers are now resisting price hikes following years of increases, leading to some decrease in pricing exuberance. Deylami remarked, "The market is still short of supply of ultra high-end that's ready to move to. There’s lots of supply under construction, but that'll take time to hit the market."
Dubai's ultra-luxury real estate expansion offers insight not just within the emirate but also poses questions about the global real estate sphere. Wealthy individuals view Dubai as not only an investment opportunity but also as a desirable lifestyle choice, guiding developers to craft ever more impressive and innovative solutions to meet this thriving demand.