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Luxury homes to continue to shine in 2023
Luxury homes to continue to shine in 2023 迪拜
By   Internet
  • 都市报
  • Luxury property demand
  • property market
  • property analysis
Abstract: Dubai's luxury residential market dominates the sector and is expected to continue to do so in 2023 as well, analysts, developers and market experts said.

Dubai's luxury residential segment will continue to climb this year and prices are expected to maintain their upward trend, but at a slower pace, due to rising demand from high net worth individuals (HNWIs), tight supply and fewer new property launches, experts said.

 

Analysts, developers and market experts said the luxury residential market ruled the sector and was expected to continue to do so in 2023 as well.

 

Referring to the latest statistics, they said that prices for luxury homes witnessed a year-on-year increase of almost 89 per cent in the third quarter of 2022 and a similar upward trend is expected to continue this year.

 

A recent report by Knight Frank also predicted that the luxury property market will grow by a further 13.5% in 2023. This is a record in itself, as no other global real estate market is expected to hit the double-digit mark this year.

 

Haider Tuaima, director and head of real estate research at ValuStrat, said the number of new luxury projects announced last year was modest. And given the current high demand, the luxury segment of the market seems to be in short supply.

 

There are currently a limited number of properties worth more than Dhs40 million that have recently come on the market.

 

We estimate this number to be just 300 villas and 80 flats, which includes off-plan and ready-made homes, most of which are located in The Palm Jumeirah, Emirates Hills and MBR City, Tuaima told Khalil Times.

 

Responding to a question about the outlook for Dubai's luxury residential segment in 2023, he said it would maintain its upward trend due to high demand in the market.

 

"We believe that the upward momentum in Dubai house prices will continue in 2023, especially for larger and better located homes, albeit at a slower growth rate," he said.

 

"Dubai's property market is currently a buyer's market and is expected to continue to be so over the next six to 12 months, however, some areas of Dubai have tilted to a seller's market, particularly those properties that have increased in price by more than 40 per cent since the mid-2020s," he said.

 

David Abood, partner at real estate consultancy Core, took a similar view, saying Dubai was attracting an influx of wealth from high-net-worth individuals, as evidenced by the sharp rise in high-ticket transactions.

 

Comparing 2022 year-to-date values to the same period in 2021, there has been a 41 per cent increase in secondary market transactions in prime locations and a 97 per cent increase in off-plan transactions for properties priced at Dhs10 million and above.

 

In addition, a record number of transactions exceeded the Dh100 million mark in 2022 - 16 transactions were recorded so far in 2022, compared to five transactions in the whole of 2021," Abood recently told Khalil Times.

 

We expect demand for high-end and ultra-high-end markets to continue due to strong demand drivers, visa reform and Dubai's positioning as a global destination and tax haven, as well as internationally comparable ultra-high-end supply catering to this niche audience," he said.

 

Imran Farooq, CEO of Samana Developers, said luxury properties will continue to attract high net worth individuals and wealthy investors to Dubai because of its excellent infrastructure, visa reform and business friendly environment.

 

It is not just millionaires or billionaires, many new people are moving to Dubai and those who left Dubai during the Covid-19 pandemic are returning.

 

The Russia-Ukraine crisis has also triggered many families in and around the war zone to move to safe countries such as the UAE, while many Europeans are moving to Dubai due to tax-free income, Farooq told The Halifax Times.

 

In addition, he said the golden visa and flexible visa regime has helped the market grow and it looks like Dubai will be an oversupplied city by 2023.

 

The current supply will not be enough to keep up with demand. In fact, the Dubai government should encourage more projects to be launched to keep Dubai sustainable. If supply is not sustainable, rents will soar and this could be a challenge.

 

Therefore, more project launches will help keep more supply in the market and ultimately the cost of living will be sustainable,.

 

The outlook for Dubai's luxury real estate sector is predicted to be bullish, based on the point I made earlier about new and returning populations coming to Dubai, he said.

 

The recent trend of billionaire migration in Dubai will increase demand for the luxury segment in 2023, he said.

 

Ata Shobeiry, CEO of Zoom Property, said there had been a massive increase in demand for luxury properties over the past few years.

 

"High-net-worth individuals and foreign investors, in particular, have shown a great deal of interest in them. So, yes, I can foresee new luxury residential projects launching in the near future," Shobeiry told the Halifax Times.

 

"I believe that the luxury residential segment in Dubai will continue to grow in 2023 as many new projects from top developers are lined up. Despite price increases, investors will continue to favour them as these properties tend to offer high returns on investment," he said.

 

Ayman Youssef, vice president of Coldwell Banker in the UAE, said most high net worth individuals prefer ready-to-move-in properties that are immediately available.

 

"As a result, we still have room for growth in the ultra-luxury segment, but its demand is more subdued. In some areas, prices have more than doubled in the last three years," Youssef told the Hallelujah Times.

 

He said that developers will always strike a balance between fast-growing small ticket sizes and ultra-luxury properties. Much of the upcoming new supply will not necessarily be in the luxury sector, he said.

 

He said: "2021-22 is a great year for the luxury market in Dubai and we expect us to maintain that growth, but at a more moderate pace and with softer price increases.

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Luxury homes to continue to shine in 2023
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