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The Capital Value Of Mid And Affordable Units Will Be Further Boosted By The Continued Growth Of The Luxury Segment.
In the second half of 2023, Dubai’s luxury property market is anticipated to maintain its strong demand, surpassing all other major cities worldwide in terms of growth rate. The influx of millionaires into the market contributes significantly to this trend, causing a shortage of high-end units. After witnessing an 11.2% surge in capital value in the first half of the year, industry experts predict an additional increase of up to 10% in high-end unit prices for the latter half. Making it the fastest-growing segment for the entire year.
Furthermore, the impact of the luxury segment extends to the capital value of mid and affordable units as well. As it continues to drive their prices higher. According to Prathyusha Gurrapu, head of research and consultancy at Core, the market is expected to see steady price increases ranging from 5 to 10% during the second half of 2023. Thanks to the remarkable sales prices and strong sales absorption the sector has experienced.
“When compared to other worldwide cities, Dubai‘s ultra-prime real estate market has always provided more affordable possibilities. However, this landscape is changing with the introduction of upscale properties and branded residences like Bulgari Lighthouse, Como Residences, Baccarat Residences, and Six Senses Residences, effectively narrowing the price gap,” stated the expert.
Savills Research indicates that prime residential property prices in Dubai are expected to witness a notable increase of 6 to 7.9% in the second half of 2023. Surpassing other cities and claiming the title of the world’s fastest-growing market. Singapore and Bangkok follow closely behind in terms of growth rate.
Dubai is expected to witness the most substantial growth throughout the latter half of 2023, as projected by Paul Tostevin, Director of Savills World Research, and Swapnil Pillai, Associate Director of Middle East Research at Savills. Mainly due to the ongoing relocation of ultra-high net-worth individuals (UHNWIs) to the city.
Savills analysts highlighted that average prime rents in Dubai have surged by an impressive 62 percent since December 2020. The city’s success in attracting UHNWIs from various countries is particularly evident in the flourishing market for branded residences. Appealing significantly to an international consumer base.”
An Increase in New Launches
With an unprecedented surge in demand, Rizwan Sajan, the founder, and chairman of Danube Properties revealed that more than 15 projects were launched and almost completely sold out between June and July. This reflects a robust investor appetite that Sajan believes will persist not only for the remainder of this year but also well into 2024. While property prices have significantly risen from the lows of the Covid-19 pandemic period. Sajan considers them still reasonable, with potential for further growth in some cases. He also highlighted that the increased rental yield compensates for higher prices, offering property buyers and investors an attractive proposition. For instance, for a Dh1 million apartment, investors can anticipate rental returns ranging between 5 to 7% annually. With rental incomes reaching Dh50000 to Dh70000.
Prathyusha Gurrapu, head of research and consultancy at Core, predicts a robust performance for the Dubai ultra-prime and prime market in the second half of 2023. Driven by the significant demand from both international and resident high net worth individuals. The market is bolstered by highly favorable socio-economic factors. Further supported by the successful launch and high uptake of numerous luxury properties throughout Dubai. These factors combined point to a promising outlook for the real estate sector in the latter half of the year.
Unlimited Upside for Dubai’s Luxury Property Segment
The chairman of Danube Properties emphasized that luxury properties have no price ceiling. Exemplified by recent villa sales ranging from Dh100 million to Dh600 million each. There is still ample room for growth in luxury property prices, contingent on factors such as location, amenities, and product quality. Remarkably, one-bedroom apartments priced at Dh1.8 million find buyers. While villas exceeding Dh100 million are purchased by ultra-high-net-worth individuals.
Even after a substantial post-pandemic surge, Knight Frank’s Wealth Report reveals that prime property prices in Dubai remain 20 to 80% more affordable than in major cities like Monaco, Hong Kong, New York, London, Geneva, Paris, Beijing, and Tokyo.
Allsopp & Allsopp reports a noteworthy 176 deals in Dubai’s ultra-luxury property segment. Each exceeding $10 million, surpassing transaction volumes in London, Paris, and New York. The buyer registration witnessed an impressive 84 percent increase. Leading to a 28% rise in overall sales, signaling a growing interest among new buyers to capitalize on Dubai’s real estate potential.
Lewis Allsopp, CEO of Allsopp & Allsopp, expressed delight in witnessing Dubai’s unparalleled status as a global hub for luxury real estate. The positive market analysts for H1 2023 affirmed Dubai’s position as the preferred destination for ultra-luxury property buyers, and Allsopp & Allsopp eagerly looks forward to H2 2023.
Top Cities in H1 2023 for Capital Value Increases
- Dubai
- Mumbai
- Cape Town
Top Cities Expected To Have Capital Value Growth In H2 2023
- Dubai
- Singapore
- Bangkok
The Prognosis For The Luxury Housing Market In H2
- Core projects a probable 5-10% surge in luxury property prices during H2 in Dubai.
- Savills forecasts an expected 6-7.9% increase in luxury property prices during the second half of the year in Dubai.
List Of Recently Launched Luxury Projects In Dubai:
- Bugatti Residences by Binghatti
- Bulgari Lighthouse
- Como Residences
- Baccarat Residences
- Six Senses Residences
- Source: Core, Savills, KT Research
