_DUBAI’S X-FACTOR

The attractiveness of Dubai to international buyers and investors has morphed over the last 23 years since the property market was unlocked for overseas buyers.

Faisal Durrani May 24, 2023

The initial speculative nature of the residential market has now given way to a market that continues to demonstrate signs of maturing, with micro-market drivers from world-class schools/healthcare and shopping malls to macro-economic policy decisions, all working together to raise Dubai’s global standing.

INFRASTRUCTURE AND TOURISM ARE KEY

In our survey of global HNWI, the emirate’s high-quality transport infrastructure has been cited as the strongest factor that ‘makes Dubai an attractive place for a real estate purchase’, with 47% of respondents citing this reason.

Separately, the city’s explosion onto the global tourism scene, facilitated mainly by the world’s largest international carrier, Emirates, and busiest international airport, Dubai International Airport, has immensely eased access to the emirate since Emirates first took to the skies in 1985.

Dubai’s rebounding in the wake of the pandemic has been accelerated by the government’s decisive response and is now on course to see tourist numbers surpass pre-Covid levels. Indeed, 4.7 million visitors passed through the emirate’s gateways in during Q1 2023.

According to those who have never visited Dubai, the top two attributes making Dubai an attractive place for a real estate investment are its place as a global tourist destination (54%) and no taxation (51%).

SUPPLY VARIETY IS THE SPICE OF LIFE IN DUBAI

The third reason cited for Dubai’s attractiveness as a place to purchase property is the ‘wide range of project availability’, with 38% of respondents selecting it. For those worth over US$ 10 million and for UK/European HNWI, this is also the top attribute that makes Dubai an attractive place for a property purchase, at 51% and 38%, respectively.

Dubai usually sees approximately 30,000-35,000 homes added each year. Currently, it has around 94,000 residential units under construction, which are due to be delivered by the end of 2026. Assuming an equal number of completions over the next four years, the market could in theory see around 24,000 homes delivered per year between now and 2026, which would be below the long-term average. Furthermore, in our experience 30-40% of this total is likely to be delayed for one reason or another, reducing the actual number of homes likely to be delivered.