Dubai’s ultra-prime property still a magnet for investors
Supply in the ultra-prime category is still somewhat limited in Dubai
Expo 2020 is expected to have a huge impact on Dubai’s property market. The potential increase in economic activity and business sentiment should provide a boost to the economy and improve growth prospects.
The last few months have offered a wide range of views, opinions, concerns and opportunities for those with an interest in Dubai’s property market, whether they are looking to enter, exit or simply make a purchase. But while the number of sales across the board is noticeably down, prices are remaining steady in ultra-prime areas as demand for properties in these locations continues. But why is that?
Well, the thing that must be understood from the outset is that ultra-prime property performs in a way that bears little or no resemblance to the rest of the property market. And consequently, interest in Dubai’s ultra-prime property market from overseas investors remains very strong despite the market slump.
In spite of economic problems in other parts of the world and property prices falling in numerous areas and sectors, there’s always someone, somewhere in the world that thinks it’s the right time to be investing in high-end property. And buyers at this level are more sophisticated. They are usually hoping to add to an existing portfolio and have a team of expert advisors who are specialised in prime property sales; so they know precisely what they want and when to snap it up.
Dubai is arguably one of the very few global cities where there is a clear distinction between ultra-prime and prime property markets and it is not just on price. But what distinguishes an ultra-prime residence from a prime one?
Buyers in the ultra-prime category are looking for particular characteristics and features when choosing the perfect residential developments in Dubai, mainly focusing on prime location, seclusion, special services as well as unique properties or those which are occupied by like-minded people.
It is clear that during the current period of uncertainty, as the UAE economy continues to adjust, that buyers are hedging their investments by increasingly buying in areas that will always have an appeal above others, in places such as the Palm Jumeirah. And the availability of desirable homes in these areas is where things get very interesting indeed.
Supply in the ultra-prime category is still somewhat limited in Dubai, which has its advantages for investors. Demand for such properties exceeds supply and it’s the imbalance between demand and supply that limits price decreases.
Additional ultra-prime developments will undoubtedly enhance Dubai’s status as a global investment hub and further entice the world’s ultra-high net worth (UHNW) individuals. However, the properties must satisfy the ever-changing preferences of affluent buyers and it is equally important to avoid oversupply in a market, which could easily become saturated.
The number of UHNW individuals in Dubai alone is expected to grow 60 per cent by 2026. A property in a global city like Dubai is typically at the top of the shopping list for wealthy individuals, and their enduring appetite for these types of investments is expected to see them exert even greater control over global property markets in the next decade.
Already there are signs of market growth in the sector, with Dubai’s ultra-prime housing market witnessing an uptick in transactions. Growth is both organic and incremental as ultra-prime areas expand and new ultra-prime developments are built.
With Expo 2020 fast approaching, quicker than anyone really imagined it would, I think the influx of visitors and having the world’s attention firmly fixated on Dubai will provide even further stimulus to the ultra-prime market and the property market as a whole.
What’s important to remember is that while properties at the top end can drag up prices across the board, movement at the top also helps to increase activity all the way down the chain; so that’s a win for everyone.
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Credited to: Khaleej Times