The Dubai luxury property market soars with record-breaking penthouse deals
The high-end luxury category has been the primary driver of Dubai’s real estate market’s remarkable demand during the post-pandemic period. In order to benefit from the low rates and huge profits, high net worth individuals from growing economies like Western Europe and the US have flocked there, pushing prices to record highs over the past two years.
The environment surrounding the premium real estate market has substantially changed. A few years ago, very few homes would trade for more than Dh35 million. Penthouses in Dubai, however, have recently set the stage for the growth of ultra-luxury real estate, with one of the units in Bugatti Residences by Binghatti reaching Dh750 million, as wealthy people have been actively seeking safe havens that can safeguard and enhance their investments, and provide them and their families with a truly world-class lifestyle, high-quality education, and other facilities. And Dubai fulfills all of those criteria for the wealthy.
Without a doubt, penthouses are cherished possessions and prestige symbols. The upmarket real estate possibilities in Dubai continue to attract a lot of interest from international investors. They are not only a well-known address, but they also provide residents some of the most lavish amenities and services, breathtaking views of the city, and a higher standard of living.
Petri Mannila, director of luxury at Penthouse, affirms due to the increased demand for these homes driven on by the high level of uncertainty in wealthy countries, there is a shortage of luxury residences in Dubai.
“We have seen over 75 percent of our buyers relocating permanently to Dubai, viewing the city as a safe and stable place to live and work. We are witnessing very strong demand for ultra-luxury properties from Europe’s traditional prime source markets and the CIS. We are also just beginning to see the return of investors from previously closed markets like China and greater interest from UHNWIs from the Americas,” says Mannila.
The market is experiencing a shortage of units for both end-users and investors due to the demand for luxury homes surpassing Dh20 million being fueled by institutional investors, family property funds, high-net-worth individuals, and company owners.
“Also, there was a freeze in new projects during Covid-19, which caused a shortage of these luxury properties. However, new units are now entering the market to cater to the tastes and requirements of their owners.”
Developers tapping penthouses
Penthouses continue to be in high demand, thus developers are increasingly looking to this region to produce premium residences.
Avenue Residence 5 will have penthouse flats for the first time in Al Furjan, claims Nabni Developments, a reputable real estate development company with headquarters in Dubai.
“Al Fujran is increasingly getting more premium and demand. It is the area targeted by families looking for future homes and proximity to many signature locations or attractions,” said Khalid Al Jaziri, chief commercial officer, Nabni Developments.
“We are thrilled to introduce penthouse units in this vibrant community, offering an elevated lifestyle to our discerning residents. We believe Avenue Residence 5 will set a new standard of excellence in the real estate market,” said Al Jaziri.
In order to satisfy their high-profile clients, developers are responding to the increased demand by incorporating more opulent and distinctive amenities into their complexes. In addition to offering their tenants the ultimate protection, security, and privacy, most penthouses also provide them with spectacular panoramic views of the city. In certain situations, amenities include concierge services, valet parking, private elevators, swimming pools, and access from the parking lot and lobby.
Who is buying and where?
A penthouse normally costs between Dh5,000 and Dh15,000 per square foot, depending on the comforts and other features present.
“We have seen a mix of nationalities purchasing these super-luxury penthouses. There is greater interest from Indians for properties around the Downtown area while Europeans, Russians and Emiratis tend to pick up penthouses with beach access,” added Mannila.
With houses valued at Dh15 million and higher, Penthouse.ae recently broke the record for the highest price per square foot for a property on the Palm Jumeirah. Only an apartment sold for Dh13,543 per square foot in the Bulgari Resort and Residences was more expensive in Dubai than the transaction at Dh12,387 per square foot. A three-bedroom duplex apartment in the Royal Atlantis sold for Dh44 million.
The most sought-after locations for penthouses in the emirate include The Palm Jumeirah, Dubai Marina, Downtown, Bulgari Residences in Jumeirah Bay, and Marsa Al Arab.
As can be predicted, end users acquire the majority of penthouses, but there are also a tiny number of investors looking to profit from Dubai’s luxury market segment, which has increased more than tenfold since 2020. “In fact, in the first half of this year alone, we have nearly matched the total number of deals in the $10 million-plus segment compared to the whole of 2022,” added Mannila.
Demand drives up the price in a direct proportion. The luxury real estate market in Dubai, especially for penthouses and villas, is the ideal place for this. The trend is projected to continue for the foreseeable future as long as demand remains unabated due to the two categories’ already large price rises.
“With supply constrained and prices maintaining an upward trajectory, the current window of investment opportunity is exceedingly promising. Dubai’s luxury property market has witnessed substantial double-digit growth in the first half of this year, with a positive outlook forecasted for the next 3-5 years,” concluded head of luxury at penthouse.ae.