How Dubai’s luxury property segment is defying all odds

These past six months have been filled with superlatives in Dubai’s luxury property market, from incredible new properties coming on the market to record-shattering transactions. After the rollercoaster that was 2020 – from fears of the market plunging into chaos in March to the shattering of a seven-year record in November – we had predicted that 2021 would be the year of super prime real estate. Thus far, the year has not only met that prediction, but greatly exceeded it.

Looking at super prime properties, there were 22 homes worth Dhs35m or more sold in the first five months of this year, a volume not witnessed since 2015. In fact, in April, 3 per cent of the Dhs10.97bn in sales recorded in Dubai’s property market were at a price point of Dhs10m or higher. It is a great time to be in the penthouse market, with units in One Palm and W Residences proving to be quite popular. As projects such as The Residences Dorchester Collection and Atlantis, The Royal Residences get closer to completion, we are seeing very high levels of buyer interest in them as well.

Villa sales across the city have been particularly robust, with data released by Property Finder revealing that one in three properties sold in the first quarter was a villa or a townhouse. Palm Jumeirah has been a hotbed of activity, and some of the best frond villas have been disappearing off the market with remarkable speed. I was very delighted to be involved in two of this year’s most expensive sales so far – both on Palm Jumeirah with a selling price north of Dhs100m each. These transactions occurred within a few weeks of each other, and really highlighted how quickly that segment of the market is moving right now.

There have also been other transactions at a comparable level for other frond villas in Palm Jumeriah and in areas such as Dubai Hills Estate. We have been fortunate to end H1 with the sale of a magnificent custom-built villa for an undisclosed sum – as a matter of discretion, I cannot reveal further details at this point.

But what we are seeing is that buyers who are very keen to purchase a property in Dubai are not put off by the price. The city has become something of a safe haven during the pandemic, offering a welcome respite from the rolling lockdowns that continue to pop up across Asia and parts of Europe. Anyone who frequents Dubai – even for a few months a year, is now looking to call it their home. And at prices that are far cheaper (and offer far greater value) than what you would find in London, Monaco or Hong Kong, there is no better time to buy.

Mum’s the word
Discretion has become more important to our selling clients than ever before in 2021, especially those who are at the higher end of the market. Owners of high-end properties who wish to sell are increasingly preferring to keep their home out of the public eye, marketing them exclusively with one agent.

Far too often, sellers have been burned by brokers who bring in unqualified clients, trying to push a downward negotiation on price and often leading to unreasonable offers that cause a deal to fall through and extend the selling timeline of the property. By being more selective about who they work with and limiting the exposure of their property, sellers are able to ensure that only qualified clients walk through their door, which in turn greatly increases the chances of selling at the asking price.

Our Private Client Office is a division of the company that caters specifically to our most high-end clients, and we have been approached by quite a few sellers over the past few months who wish to keep their properties off the market. Working alongside them, we can create a tailored marketing plan that aligns with their goals and their timeline for selling the property. We also follow a very rigorous qualification process for potential buyers to weed out window shoppers and discount seekers.

Outlook
It is predicted that property prices will rise for the first time in six years, which is a shift that we had expected to happen last year, before global circumstances changed.

The property market in Dubai has always been resilient, and I think it’s fair to say that everyone was surprised at just how quickly it bounced back in the latter half of 2020.

Looking ahead, I do not see any slowdown in activity over the short to medium term at least, and it is safe to say that our Private Client Office will be especially busy dealing with both high-end buyers and sellers to produce a few more record-breaking transactions before the end of the year.

Riccardo Scala is the head of luxury sales and leasing at luxuryproperty.com

Taken from Property Finder’s Prestige special report in Gulf Business’ August issue