Dubai is currently witnessing a massive appetite for luxury residential units among investors and homeowners, according to leading real estate brokerage Union Square House (USH). From 2021 to date, luxury residences by all major developers in Dubai have been fully sold out, and now trading at a premium on the secondary market.
At the height of the pandemic and for the longest time, every luxury residential unit worth more than a million US dollars was a burden on the real estate market in Dubai. Premium properties were barely selling as Dubai turned into a predominately buyer’s market in the wake of COVID-19.
Most investors adopted a buy-to-let model, purchasing small-scale, low-ticket units in bulk to achieve a higher return on investment. Tourism was primarily driven by low-income people who were more likely to opt for smaller, affordable units.
With the pandemic coming to an end, all that is changing. More and more people, especially millionaires, are moving to Dubai with their families and investing in holiday homes and permanent residences. According to New World Wealth, Dubai’s population of high-net-worth individuals (HNWIs) soared to 54,000 HNWIs in June 2021 from 52,000 in December 2020, achieving a growth of 3.8%.
Gaurav Aidasani, Founder & Managing Director, Union Square House, said: “The influx of millionaires that Dubai is witnessing has been boosting the luxury property market. Investors today still seek high returns on their investments. However, the main reason behind their investments now is to own a super-prime home in Dubai. This has created a market shift in the luxury property category, turning the tables and causing investor demand to outstrip market supply.”
“Based on sector-wide sales performance, luxury real estate was struggling at the height of the pandemic. Over the past few years, very few developers have been rolling out high-end units. The slow market characterizing the pandemic era brought a shortage in supply of luxury real estate in Dubai,” Gaurav added.
“The beginning of 2022 marked a new phase for the real estate sector in Dubai, with the big swing from market oversupply to high demand for luxury properties continuing to bring market repercussions. As a result, we will be witnessing the launch of several new luxury real estate projects in Dubai this year,” Gaurav concluded.
In 2021, USH achieved AED 3 billion in real estate transactions, expanded its customer-base from six to 30 nationalities, saw a threefold growth in business performance and a twofold growth in team members. The real estate brokerage also focused on new markets, capitalizing on demand for luxury homes from European, American and Canadian customers.
USH has recently claimed the number one spot as the most awarded real estate agency in Dubai. The company has received the “Top Real Estate Agency” award from Emaar Properties for the past 10 years in a row, Dubai Properties (seven consecutive years), Meraas Properties (two consecutive years), RERA (2021), Dubai Holding (2021), and DAMAC Properties (2021). Other notable awards include Majid Al Futtaim (First Performing Partner for 2021), Nakheel (Top Performing Number Two Agency for 2021) and District One Meydan (Number One Agency for 2021).