Real Estate Firms in Dubai Are Racing to Attract More Buyers from Europe, Asia, and the Americas
Dubai is adding a new wave of luxurious mansions and penthouses — some featuring cinemas, spas, and private elevators — as developers target millionaires from around the world.
These ultra-luxury homes are being priced from $60 million to over $120 million, with buyers from Europe, Asia, and the Americas flocking to Dubai. The amenities are getting more extravagant, even by Dubai’s standards, which are already known for their glitz and glamour.
One developer even transported a huge glass wall thousands of miles to give the buyer the sea view they wanted. Another added a private lobby and elevator for the buyer of a penthouse so big it spans two towers. Some homes even feature a swimming pool with a movable floor that rises up to blend with the garden tiles during parties.
While prices across Dubai’s real estate market have been moderating after a sharp increase since 2021, developers are still building new palatial homes along the city’s most expensive beachfront locations.
“The high-end market is the most profitable,” said Mark Phoenix, CEO of Sankari Properties, which is building a $1 billion luxury tower. “If done properly, a developer can sell at top prices.”
Dubai’s market is defying the global trend where prime residential prices are slowing or dropping in many other international markets.
Last year, 435 homes worth more than $10 million each were sold in Dubai, a record that surpassed both New York and Hong Kong, according to Knight Frank. The property researcher estimates that ultra-luxury prices in Dubai will rise another 5% this year, following a 67% increase since 2021.
Wealthy families looking for second or third homes can still get more space for the same price in Dubai. On a per square foot basis, property prices in Dubai are a third of those in New York and a fifth of those in London, according to Mahdi Amjad, founder of Omniyat, a developer of ultra-luxury apartments.
International Benchmark:
“We compare our buildings to those in New York, and for the same or sometimes lower prices, you get much more space and far more amenities,” said Amjad, who plans to add another 100 ultra-luxury homes this year.
Dubai’s builders often go to extraordinary lengths to compete with other international cities.
During a recent visit to a construction site, Bloomberg News saw a massive glass dome being built in the center of a mansion. It will cover a pool and spa, and the dome can be retracted when the owners want to sunbathe. Other homes feature winding pools that allow residents to swim from the bar to the spa at the other end of the garden.
Dubai’s artificial islands are popular locations for these extravagant homes. Mansions on Dubai’s seahorse-shaped island, known as Billionaire Island, typically have private beaches and rotating parking tables that automatically turn cars in the right direction.
Wealth advisory firm Henley & Partners estimates that 6,700 millionaires will move to the UAE in 2024, surpassing all other countries.
But catering to the tastes of the world’s ultra-wealthy isn’t cheap — or easy.
Adding extravagant features means it costs developers a lot more to build, especially when considering the high upfront costs for design. “That’s where many developers get scared,” said Phoenix.
Wissam Damaa, founder of property developer Palace Group, had a buyer who wanted an entire wall in his living room made from a single pane of glass. At 17 meters by 4 meters (55 feet by 13 feet), it was the size of some swimming pools. The buyer also wanted the glass wall to disappear completely at the click of a button, providing an open sea view.
When Damaa contacted one of the largest glass manufacturers in Germany, the company took 45 days to determine whether they could meet the requirements. Eventually, they agreed, but only if a Swiss company could build the mechanical system to move the glass wall. This meant constructing an underground room where the giant pane could descend when lowered. The glass also had to be transported by ship and truck, requiring special permissions due to its size. The client got the look they wanted.
“Most of our clients have multiple homes in cities around the world, and they are very specific about what they want,” said Damaa. He currently has 15 new mansions under construction, along with a 70-apartment building worth 16 billion dirhams ($4.4 billion).
Already, nearly a fifth of Dubai’s homes are valued above $1 million, thanks to the recent surge in property prices, according to property firm Knight Frank.
A Slowdown in the Market:
Despite the ongoing rush to build, brokers and developers say that some of the excitement from recent years is starting to moderate. Price increases are slowing, and some developers are finding it harder to buy prime locations for new developments.
Honey Deylami, an executive partner at Dubai Sotheby’s International Realty, said wealthy buyers are starting to push back on price hikes after years of increases, but demand is still higher than supply for now.
“The market is still short on ultra-high-end properties that are ready to move into,” said Deylami, who sold around 2.7 billion dirhams worth of properties last year. “There is plenty of supply in the pipeline or under construction, but it will take three to four years before it’s available to the market.”
