_APARTMENTS TRUMP VILLAS

Dubai’s apartment market has experienced price rises of 15% since the start of the pandemic, with villa values rising by an even more impressive 44%.

Faisal Durrani May 23, 2023

Villas have become synonymous with Dubai’s sun-sand-sea lifestyle – our own market experience has shown that this segment of the market has been a particular favourite of the world’s ultra-rich. Indeed, it is this insatiable demand for luxury villas that has translated into a shortage of high-end waterfront homes.

In our survey, however, apartments (64%) have emerged as the more popular residential property type sought by global HNWI.

That being said, most (53%) people with a net worth of over US$ 10 million prefer to buy a villa in Dubai instead of an apartment.

Even among those who have never visited Dubai, apartments (74%) have emerged as the main preference.

MID-SIZE DREAMS

Among those targeting an apartment purchase, two- and three-bedroom apartments dominate wish lists at 62% combined, with three-bedroom apartments (33%) emerging as the more popular of the two.

This pattern persists through personal wealth brackets as well, with those of a net worth greater than US$ 10 million favouring three-bedroom apartments the most (38%).

Similarly, three-bedroom apartments are the top target for those purchasing as an investment (35%). However, those looking to invest are twice as interested in one-bedroom apartments (12%) as those purchasing a property for personal use (6%).

Among villa hunters, townhouses are the most popular villa type (23%), while a villa of any size or location (beachfront or golf course) is most preferred (23%) by those with a net worth in excess of US$ 10 million.

NEW BUILD V SECONDARY MARKET

One of the key features of Dubai’s current and third freehold residential market cycle has been the dominance of genuine end-users and second-home buyers in particular.

Historically, the market was driven largely by speculative activity, fuelled, of course, by the abundance of off-plan purchase options. In 2009, for instance, just as the Global Financial Crisis was looming large, 61% of all home sales in Dubai were off-plan transactions. The 10-year average has settled at around 42%, and both 2021 and 2022 – the first two years of this third property cycle – have stood at 42% and 44%, respectively, broadly in line with the 10-year average.

This trend is also echoed in our survey results, with 53% of HNWI buyers focussed on acquiring recently built/completed homes in Dubai. It is strongest among those with a net worth of over US$ 10 million (61%), as well as 71% of HNWI from East Asia.

Overall demand for off-plan purchases is relatively low at just 10% among global HNWI.