A record burst of sales in the priciest corners of the global property market may be ushering in a post-pandemic era of exuberance in real estate — with Dubai among the front-runners.
The West Asia business hub is the latest city to light up with what Knight Frank LLP called “a spectacular post-Covid rebound in luxury home sales.” In the first five months of the year, 22 homes worth more than $10 million found a buyer, the most since 2015 and up from a total of 19 last year.
Far from being an isolated hotspot, the emirate may mirror a pattern seen in other global cities, the consultancy firm said on Sunday. Homes in the wealthiest areas of London are selling at the fastest rate in seven years, according to LonRes data.
“The rebounding of Dubai’s super prime market echoes a wider global trend, signalling the start perhaps of a ‘Roaring Twenties’ for global real estate,” said Faisal Durrani, head of Middle East Research at Knight Frank.
“The uber luxury end of the market is a terrific barometer for general market sentiment,” Durrani said. “Homebuyers are clearly oozing with confidence when it comes to the emirate’s uber luxury homes market.”
Most of the transactions for homes in the highest price bracket were on the city’s artificial island of Palm Jumeirah, with a total of about $770 million paid for properties in the $10 million range between January and May, according to Knight Frank.
Economic activity in Dubai, particularly tourism, has rebounded in the past six months as the emirate rolled out one of the world’s fastest vaccination campaigns and opened its doors for foreign visitors sooner than most other countries.
But even as luxury property appears to flourish in Dubai, other parts of the emirate’s real estate sector are struggling. State-linked developers Limitless and Meydan are restructuring debt, while one of the top realty firms, Damac Properties, sought to de-list its shares after posting hefty losses. The founder of Damac postponed the effort this month when the regulator started a review.
And Dubai’s years-old property glut may also continue to put pressure on the value of high-end residential homes, Knight Frank recently warned.
Different Buyers
For all the similarities between major cities around the world, the differences are also telling. It’s Brits who are driving the market in the wealthiest areas of London, with the portion of U.K. buyers currently at 62 per cent, the highest in at least a decade, Knight Frank numbers show.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU