The Dubai property market has been going from strength to strength after a brief debacle it faced due to COVID-19.

While all the segments of the market have been performing exceptionally well, it’s the ultra-prime market that has surpassed all expectations. According to a recent report by Knight Frank, as many as 219 luxury homes in Dubai were sold in 2022. The value of each property was $10 million or higher.

This puts Dubai in the fourth spot on the list of most active cities for ultra-luxury real estate. New York, LA, and London were the cities that occupied the top three spots in the preceding year. If we take into account transactions of properties worth $25 million or more, Dubai took the fifth spot behind London, New York, LA, and Hong Long.

What’s Driving the Rising Demand for Luxury Homes in Dubai?

These aforementioned records clearly indicate the demand for luxury homes in Dubai is witnessing a substantial increase, and so is their price.

While the trend started during the COVID-19 when the prices lowered and the government was offering incentives for buying properties in Dubai, there has been no looking back since then,

Let’s delve deeper and find out which factors are driving the demand for luxury homes in Dubai:

Government-led Initiatives

For many years, people were hesitant in putting their money into Dubai real estate since they knew their stay here would be for a limited time period. This is why the government came up with effective initiatives, thereby putting an end to these concerns for one and all.

One of these initiatives is the introduction of the Golden visa. For the uninitiated, it is a 10-year, renewable visa, which can be obtained by foreign investors who have invested a minimum of AED 1,000,000 in Dubai real estate.

There are, however, certain conditions they must meet in order to get this visa. For example, the purchased property in Dubai must not be mortgaged.

Many people benefitted from these government-led initiatives, and this has resulted in the rising demand for luxury homes in Dubai.

Comparatively Lower Price

It may come across as a surprise to some, but property prices in Dubai, for ultra-luxury homes, are actually lower as compared to other major cities, such as Hong Kong, London, Geneva, Monaco, Beijing, Tokyo, Paris, etc.

The Knight Frank report states that an investment worth $1 million, equivalent to AED 3.67 million), can buy 105 square metres in Dubai. The same investment can buy 21 sqm in Hong Kong, 17 sqm in Monaco, 33 sqm in New York, 43 sqm in Paris, and 34 sqm in London.

This, coupled with higher returns, is one of the major reasons why the demand for luxury homes in Dubai is increasing.

Higher Interest from HNWIs

Every year, an influx of visitors, including high-net-worth individuals (HNWIs) visit Dubai for multiple reasons. When they experience the grandeur of the city, the economic growth, and the upscale lifestyle, they want to make it their home or capitalise on the real estate investment opportunities it offers.

This is evident from the fact that expatriates form 88.5% of the total population in Dubai. Properties in Palm Jumeirah, Arabian Ranches, and Downtown Dubai are some of the most popular areas that cater to them.

Better Value for Money

Apart from the comparatively lower property rates, another factor where Dubai scores high in comparison to its counterparts, such as London, New York, etc. is the high ROI it offers. It can be ascertained from the fact that Dubai real estate was the only primarily undervalued market worldwide in the year 2021, as it offered high returns at the lowest price bubble risk.

Despite the fact that property prices are increasing in Dubai, ultra-luxury homes still continue to be undervalued in comparison to other advanced metropolises.

Abundant Options to Choose From

There’s not just one type of property that falls under the category “luxury homes in Dubai”. As an investor or end-user, you will be spoilt for choices as you can choose from lavish apartments, penthouses, beachfront villas, etc.

Wrapping Up

In conclusion, the demand for luxury homes in Dubai is expected to increase even higher by the end of the year because of tightened supply. This means the prices will increase further as well. This will result in an increase in ROI for investors as well.

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