Petri Mannila, Sales Director of Penthouse.ae, delves into the current growth and significance of the luxury property market in Dubai.
Dubai's luxury property market is experiencing unprecedented growth, driven by uncertain global conditions and the appeal of safe investments. Demand for uber-luxury residences has surged, with investors from Russia, CIS, Europe, and the US showing strong interest. Developers are enhancing their offerings to cater to high-profile clients, resulting in a quadrupling of super-luxury properties. In a recent interview with Petri Mannila, Sales Director of Penthouse.ae, REM TIMES delves into the current growth and significance of the luxury property market in Dubai.
Excerpts from the interview:
How would you describe the current growth and importance of the luxury property market in Dubai, and what factors do you attribute to its rise?
Demand for Dubai’s uber-luxury residences has reached unprecedented levels as the political and economic situation in affluent western markets, Russia and Asia continues to be uncertain, encouraging wealthy individuals to turn to safe havens where they can protect and grow their investments. We are seeing very strong demand for uber-luxury properties from investors primarily from Russia, CIS and Europe, mainly from Germany, Italy, Poland and the UK. We’re also seeing greater interest from the US.
A few years ago, there would only be a handful of properties above USD 10M. In 2021, the most expensive villa sold was in the AED 120M range and just last month an ultra-luxury penthouse was sold for AED 420M. The market has available an uber-luxury villa on the Palm Jumeirah for AED 1B.
Developers are reacting to this demand and adding more luxury and unique features to their developments to cater to their high-profile clientele. Since the start of this year, the number of super-luxury properties from AED 15M and above has quadrupled and this segment will continue to grow. Penthouse.ae has accounted for 65 deals since January of this year until last month with a majority of the properties sold in some of the most in-demand and uber-luxury areas in Dubai. We expect demand to remain strong in the last quarter of this year and beyond.
In what ways does Dubai's luxury property market differ from other global luxury real estate destinations, and what advantages does it offer to potential investors and buyers?
The government has rolled out the red carpet for investors from around the world. The economic incentives and forward-looking business policies, new residency visas have all resulted in attracting greater investor interest.
We’re seeing more and more HNWIs and their families relocate to Dubai and they are prepared to pay the price for the best option as the city offers them an unparalleled lifestyle and a high level of security. The uncertainty in today’s geopolitical climate is driving investment from European countries, especially HNWIs who are looking to relocate to a safe location with world-class infrastructure.
Also, prices per square foot are lower than in other international cities and investors can also achieve, on average, between 5-10% higher rental yields than other more established markets. Right now, there is a lot of interest in Dubai’s real estate market and limited availability.
With the increasing demand for luxury properties in Dubai, how does your division adapt to cater to the evolving needs and preferences of affluent clientele?
We cater to connoisseurs of luxurious lifestyles and there is no bigger or better market for them in the world other than here in Dubai. We offer our clients a complete 360-service from helping with visas, opening bank accounts, setting up companies, property management, legal services and more. While currently only listing properties in Dubai, Penthouse.ae will also expand to cover properties in Abu Dhabi and will have a dedicated team of 25 luxury property experts by the end of this year.
What specific initiatives or strategies does your division employ to promote Dubai's luxury property market internationally and attract high-net-worth individuals and investors?
Our goal is to reach UHNWI’s in their home countries where we focus on providing critical information about Dubai’s property market to the right audience.
We are strong in our digital strategy and utilize targeted international marketing campaigns to showcase the city’s unique offerings such as luxury developments, iconic architecture and lifestyle amenities. These campaigns include advertising in international publications and online platforms.
Understanding preferences and trends of UHNWI’s and investors is key. By identifying our consumer archetype and tailoring marketing strategies accordingly, we reach and engage the international market.
We are exploring strategic partnerships and collaborations with influential individuals and organizations where we can create significant value for each other. Our focus is to create a sense of exclusivity with our values of precision, professionalism and personalization.
Can you discuss any upcoming trends or developments in the Dubai luxury property market that potential buyers and investors should be aware of?
Luxury properties are being designed to offer unique and immersive experiences beyond traditional amenities. Developers are creating spaces that foster a sense of community and experiential living. The integration of advanced technologies into luxury properties is becoming more prevalent. There is a growing emphasis on sustainable and environmentally friendly developments and developers are incorporating eco-friendly features, energy-efficient technologies and sustainable design practices.
The payment and financing plans offered are flexible and this is a huge attraction for buyers and investors. Dubai’s real estate market is one of the best regulated in the GCC with the government having adopted several measures such as the escrow regulation, foreign ownership rights, residential visa, and a stable currency. Dubai 2020 Urban Master Plan is designed to make Dubai the city with the best quality of life with an increase in land area for education, healthcare, and nature reserves. Also, the government has introduced various initiatives and policies to attract investment and stimulate economic growth.
The integration of the hospitality and residential sectors is gaining momentum. Developers are collaborating with world-renowned hotel brands to create branded residences, offering the luxury of hotel services and amenities within residential developments. This concept appeals to buyers seeking a blend of luxury living and hotel-like experiences. Dubai has witnessed a significant development in branded residences, as in other tier 1 cities such as London, New York, Miami and Hong Kong.
Dubai’s vibrant real estate market and its appeal as a global business and leisure hub make it an attractive destination. Consulting with real estate professionals and understanding local regulations and dynamics are essential when considering an investment in branded residences.