New perspectives post pandemic are transforming Dubai’s real estate sector

In 2020, 69 per cent of consumers in the MENA region predicted that the way in which they live their lives would significantly change following the Covid-19 pandemic. Two years later, the health crisis may have extended beyond the expected timeline, but its legacy has already made itself evident. Most notably, a mass reassessment as to what makes life meaningful by consumers has led to a re-evaluation of personal consumption habits, a renewed focus on health, wellbeing and leading an active, outdoor lifestyle, and the dawning realisation that paying attention to the social and environmental impact of conspicuous consumption requires more than mere lip service.

This adjustment to the consumer mindset represents a seismic shift that is being felt across every industry all around the globe, from the retail sector being prompted to adopt a more authentic way of doing business as an increasingly influential segment of consumers shun brands that are without purpose and don’t align with their values, to the e-commerce boom resulting from shoppers being propelled into buying daily necessities online as lockdowns rolled into place across nations, many for the first time. For the real estate sector, buyers are increasingly prioritising purchasing homes in walkable neighbourhoods that promise a better quality of life, have access to green open spaces, and are constructed with sustainability principles at the front of mind.

Having gone from strength to strength over the course of the past two years, Dubai’s residential real estate sector is proving no exception to the global trend. Having rebounded in 2021 with an impressive 65 per cent increase in transaction volumes and a 71 per cent rise in value on the previous year to reach a total value of Dhs300bn, villa sales have and continue to perform well. Recent reports show an annual rise in villa transactions of 20.4 per cent and 1.9 per cent month on month in April alone; conversely, apartment prices are up by 9.6 per cent year-on-year but showed a slight decrease of 0.1 per cent cent. Overall, the market saw record sales of Dhs18.2bn in April 2022; the highest value recorded for the same month since 2009. The outlook remains bullish, with the residential market remaining below the 2014 peak, indicating ample room for growth – an appealing outlook for both investors and owner-occupiers.

Another influential factor is that the global prime markets are experiencing a robust uptick in volume and values. Driven by the world’s wealthiest seeking to minimise risk by diversifying their portfolios through increased investment in real estate, which is widely seen as a more tangible asset class, the outlook for prime capital values across the world’s global gateway cities is overwhelmingly positive. With the world’s population of ultra high- net-worth Individual (UHNWIs) forecast to increase by 27 per cent by 2025, which will see over 660,000 individuals each having $30m or more in net assets, and with around two-thirds of this wealth typically being tied up in property, the expectation for this trend to continue is entirely reasonable.

Dubai has seen its prime residential market rise by almost 60 per cent in the last 12 months to reach its highest level since 2015, following an annual capital value growth rate of 17 per cent in 2021. According to Knight Frank, 93 homes valued at over $10m were sold in Dubai in 2021, more than in the previous five years combined. Compared to other global gateway cities, Dubai remains undervalued, despite prime residential values having climbed 17.4 per cent last year. Consequently, the city offers significant appeal to high-net-worth individuals looking for global real estate investments with substantial room for growth, the added benefit being that the UAE’s business hub offers an increasingly friendly foreign direct investment environment bolstered by recent legal and regulatory reforms that not only simplify repatriation, but bring added security for those that desire to remain for the long term.

Combined with the enduring appeal of world-class infrastructure, ongoing urban greening projects, and an outstanding quality of life, the way in which Dubai handled the health crisis has also engendered high levels of trust in a world where, for many, the world appears to be rife with uncertainty. Going forward, price acceleration is predicted to be fuelled by a scarcity of super-prime villas in the property pipeline, driving the gap between supply and demand, combined with low mortgage rates and continued interest from foreign investors. Tilal Al Ghaf, Majid Al Futtaim Communities’ landmark destination in Dubai, epitomises how residential developments can be shaped to  deliver to the fresh wave of consumer demand arising from the new collective consciousness that will reframe  how we live in the post-pandemic future. The peaceful resort-style gated community stretches out around a central recreational lagoon with crystal-clear azure waters bordered by white sandy beaches.

An open green communal space, The Park, slopes gently down to the lagoon’s shores and, carefully positioned to take full advantage of the stunning vista, is the Pavilion – Tilal Al Ghaf, which stands as a testament to Majid Al Futtaim Communities’ commitment to sustainable living and lifestyles. Currently in use as the destination’s Sales and Experience Centre, The Pavilion is the region’s first ‘Zero Positive’ building and the first in the UAE to achieve the BREEAM Excellent rating. Painstakingly designed according to biophilic design principles to strike the right balance between cutting-edge aesthetics and environmental standards, the building was most recently recognised at the 2022 BREEAM Awards with the Regional Award for Asia; past awards and certifications include WELL ILFI Zero Energy certification and MENA Green Building Awards – Zero Building of the Year 2019.

The Pavilion embodies the unique lifestyle proposition offered by the wider Tilal Al Ghaf community. As Dubai’s first BREEAM interim certified project, Tilal Al Ghaf adheres to a development approach rooted in human-centric design and robust sustainability standards to deliver an exceptional quality of life and great experiences every day.  Ample opportunities for residents to connect with nature and lead an active outdoor lifestyle are provided with nearly 500,000 square metres of parks, green open spaces and treescapes throughout the community, which is designed to be walkable with neighbourhoods interconnected by 18 kilometres of walking trails and 11 kilometres of cycling and jogging tracks. Consisting exclusively of townhouses, villas and – for the super-prime segment – mansions, the single-family premium community caters to a range of life stages and budgets, from couples and young families looking for their first home to more established individuals looking to invest in an expansive six-bedroom waterfront property, with unique features such as an internal garden oasis in the heart of the home, private spa and gym zones, and direct beach access.

The writer is the CEO of Majid Al Futtaim Communities