Dubai's ultra-luxury real estate booming amid limited supply
Dubai's ultra-luxury real estate sector is set to continue its robust growth trajectory in 2025, fuelled by a scarcity of ready properties amid keen buyer interest and a steady influx of high-net-worth individuals (HNWIs), said a new market study.
Over the last ten years, sales of luxury Dubai villas and apartments valued above AED15 million ($4 million) have risen dramatically, reaching AED71 billion ($19.3 billion) in 2024 for the second year in a row, an increase of almost 688% since 2015.
However, while just over 326,000 are properties currently under construction in Dubai, a report by fäm Properties reveals a clear picture of the limited number of luxury or ultra-luxury properties that will enter the market over the next two to three years.
It says a scarcity of ready properties in particular, amid keen buyer and investor interest, will support continued price growth in 2025. The latest data from DXBinteract, shows that only 16,500 units being built are in the luxury or ultra-luxury sectors as follows:
•AED 5-10 million: 10,209 units
•AED 10-15 million: 2,360 units
•AED 15-30 million: 2,831 units
•AED 30-60 million: 809 units
•AED 60+ million: 330 units
In addition, the vast majority of these are a long way from completion, with 72% in the
0-20% range in terms of construction progress.
"These figures underscore a restricted supply of ultra-luxury properties, indicating a highly exclusive and limited market, with demand expected to stay strong for at least the next two to three years," said Firas Al Msaddi, the CEO of fäm Properties.
"Beyond that, the balance of supply and demand will depend on how new projects are received. But if the forecasted inflow of around 6,500 HNWIs per year holds true through 2024-2026, we're likely to experience steady demand, supporting price appreciation," he added.
According to the report, the demand for ready ultra-luxury apartments also remains significantly higher than supply, driving prices up. Buyers are focused on true branded residences with a genuine luxury element.
As the ultra-luxury market matures, a shortage of villas and growing competition in the apartment market are shaping buyer preferences and developer strategies, it stated.
Prime land for ultra-luxury villas in areas like Palm Jumeirah, Jumeirah Bay Island, and Emirates Hills is extremely limited, resulting in a critically short supply keeping demand consistently high.
Supply and demand for apartments in the resale sector are relatively balanced. Buyers also have options in developments nearing completion. Demand for off-plan branded apartments remains strong, with developers like Sobha, Emaar, and Damac giving investors more options, it added.
Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
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