Real Estate: Where does the market in Dubai go

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Real Estate: Where does the market in Dubai go

The luxury market is currently in a more balanced situation, according to the CEO of the firm.

Following the pandemic, Dubai saw an influx of wealthy people that changed the city’s real estate market and increased demand for opulent mansions.

Even if the market is expanding due to an influx of millionaires and billionaires, properties under $550,000 (AED2 million), which account for 71% of all transactions, continue to dominate the off-plan apartment market.

Firas Al Madid, CEO of farm Properties, offers an insider’s view on the changing luxury real estate market in the city in this exclusive interview with Construction Week Middle East.

Maddi talks on the major themes that will shape the market in the upcoming ten years, such as the emergence of smart home technologies, sustainable living, and the deliberate creation of upscale communities.

In what ways do you anticipate the Dubai luxury property market changing in the next five to ten years? Which major themes and forces do you foresee.

After COVID-19, the luxury house market in Dubai saw a dramatic transformation that cemented the city’s position as a top choice for affluent travelers.

Dubai has welcomed tens of billionaires and thousands of millionaires from various countries during the last three years, fostering the growth of a vibrant and strong real estate market.

This inflow guarantees that, should any choose to leave, they will probably sell to other affluent people, retaining the capital in Dubai’s real estate market.

After a bubble caused by an excess of supply, the luxury market is currently in a more balanced situation.

Although there is now a healthy balance between the supply and demand for ultra-luxury flats, the market is anticipating a big test in 2026 when many new projects are anticipated to be finished.

The market will probably stabilize as a result, with growth largely dependent on particular areas and towns.

Demand for villas, especially those close to Dubai’s waterfronts or downtown, is still high and is mostly driven by end users.

Sincere customer desire is shown in the fact that these opulent villas are frequently sold ready rather than off-plan.

Unique locations and properties, like the Nordic minimalist-designed villas in Al Wasp, are expected to have continuing price appreciation, even though significant price growth is not predicted in the near future.

Prime but underdeveloped communities—particularly those close to key locations—are expected to see consistent price growth.

Dubai is the epicenter of luxury living, and demand for branded real estate is rising.

This pattern demonstrates the city’s dedication to upholding its standing as a premium and innovative destination.

What effects, if any, do you think the increased emphasis on sustainability and eco-friendly living will have on Dubai’s luxury home designs and features.

Although Dubai’s demand for sustainable living is not as high as it is in certain European countries, like Switzerland, it is nonetheless growing.

In keeping with Dubai’s plans for urban living, many luxury villa developers are implementing sustainable elements, biodiversity, and green spaces.

The focus is on developing urban oasis communities with lots of greenery, lagoons, and even nature reserves.

Developers understand that basic amenities are no longer adequate, such as playgrounds or community pools. Locals want to be closer to nature because it improves their health and happiness.

As a result, providing sports and fitness facilities is prioritized.

Furthermore, using cutting-edge building materials and clever technology, luxury developments are embracing sustainability in terms of energy and water use.

How is Dubai’s luxury home market being shaped by the increased focus on automation and smart home technology? Which innovations are consumers requesting?
Automation and smart home technology are increasingly considered common features in high-end homes.

While security systems are less important in Dubai due to its low crime rate, smart technology is more concerned with home upkeep and management.

Green technology and sustainable living are becoming more and more important to locals, who are looking for solar panels, smart sensor lighting, and central air conditioning systems.

Considering the intense summer heat in Dubai, these elements are crucial for keeping homes immaculate.

What impact are the lifestyle choices and demographics of affluent consumers having on the kinds of luxury real estate being built in Dubai?
Although certain nationalities have a preference for waterfront residences, these areas are in high demand worldwide.

European and Commonwealth of Independent States buyers frequently look for simple designs in desirable areas.

The secret to Dubai’s luxury market’s future is to combine grandeur with minimalist design, especially when it comes to ceiling height.

Luxury villas in the past were typically located far from the city center, either on the waterfront or with views of lakes or golf courses.

Al Wasp is an example of the “Downtown Villas of Dubai,” a new trend that has evolved.

This community offers quick access to the financial district and cultural hubs because it is situated as close as feasible to downtown.

Communities with waterfront access and advantageous locations, like La Mer, are also drawing attention.

All things considered, Dubai’s luxury industry has grown to satisfy the needs of extremely wealthy people from a variety of backgrounds.

Which distinctive features and lifestyle options are Dubai’s luxury developers utilizing to set their projects apart?
Conventional luxury complexes were centered on proximity to the beach and golf areas.

Luxury projects with distinctive features like private pools, wellness centers, business centers, fine restaurants, natural reserves, and sports facilities have become more and more popular since the COVID-19 pandemic.

Like in New York and London, functional design features are also common, with show and chef kitchens in homes intended for extremely wealthy people.

In the medium to long term, how do you envision the demand and pricing for opulent properties in sought-after Dubai neighborhoods like Downtown, Palm Jumeirah, and Dubai Marina changing?
Given that Palm Jumeirah prices have increased significantly over the last two years, stability is anticipated.

But when completely developed neighborhoods have reached exorbitant prices, focus is turning to new places like Palm Jebel Ali.

In the ultra-luxury real estate market, end users—rather than investors—determine prime locations.

What dangers and obstacles do you see for the market for luxury homes in Dubai?
The main obstacle facing developers is coming up with innovative products that make them stand out.

It’s critical to market these advancements to the relevant consumers, which calls for creative brand alliances and lifestyle elements.

Another difficulty is sustainability, making sure that opulent experiences continue to be profitable and that service fees pay for upkeep. Certain ultra-luxury amenities may be more expensive to maintain than they are useful.

Although Dubai’s luxury market has a bright future, there is a chance of an excess supply in 2026.

Investors’ profit margins are restricted when developers offer off-plan assets at future prices, therefore this needs to be carefully considered.

Do you have any other remarks to make?
Developers need to concentrate on niche markets, like luxury offices, and produce distinctive designs that draw in ultra-high net worth individuals if they want to perform well in the luxury market.

Customized services will continue to be a competitive edge. Investors wishing to make sure projects live up to expectations should exercise caution and carefully consider contractual commitments.

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