_A BATTLE OF HEARTS AND MINDS

Dubai’s rapid rise as a luxury second-home market traces its roots back to the start of the pandemic and the way in which the government so decisively contained an unprecedented event.

Faisal Durrani May 24, 2023

The ensuing rapid return to normal life has helped catapult the city into the minds of the global elite, who are now jostling for a slice of life in Dubai by purchasing second or holiday homes.

SEASONS IN THE SUN

Our survey results have ratified our own market experience when it comes to demand for holiday homes or second homes.

While ‘investment/capital gains’ (27%) rank as the number one reason amongst our HNWI respondents for making a residential purchase in Dubai, this does not preclude a purchase from being used as a second home or a holiday home.

Purchasing a ‘second home / holiday home’ on its own has been named the second strongest driver for buying residential property in the emirate. At a geographic level, North American buyers (27%) and UK/European buyers (21%) cite the purchase of a holiday home or second home as the main motive for a residential acquisition in the emirate.

The main drivers for buying a home in the city vary depending on net worth. Still, the standout reason for our US$ 10 million+ net worth respondents, ranked first, is expanding their property portfolio (31%).

Separately, 26% of those who have never visited Dubai say they intend to use their property as a second home, while 34% state they are merely looking for an investment.

In contrast, around half (54%) of those visiting Dubai once a year are interested in making a property purchase as an investment, with 27% listing capital gains as a main driver. 24% say they intend to use their property as a second home.

And regarding those who frequently visit Dubai, 15% intend to purchase a residential property as a primary home, while 13% plan on using it as a second home.

BIG SPENDERS

Collectively, our respondents have set aside US$ 2.5bn to spend on property purchases in Dubai this year. 58% are prepared to spend up to US$ 5 million, with over a fifth (22%) willing to commit US$ 5-10 million.

8% want to spend over US$ 80 million, with 21% of those with a personal value of over US$ 10 million ready to spend this amount. The average budget for this elite group stands at US$ 40 million.

East Asian buyers have an average budget of US$ 26 million. While 30-40% of respondents in other categories choose to spend under US$ 2 million on their Dubai property purchase, this falls to just 12% amongst East Asian respondents. The largest share of this group (26%) is prepared to allocate over US$ 20 million.