The apex of affluence: exploring the surge in luxury property sales in Dubai
Luxury property sales in Dubai are soaring, outperforming other markets and drawing property investors from around the world
Dubai is currently at the forefront of global luxury property price growth, leading the charge as the market bounces back in the post-pandemic era. Samuel Seeff, the chairman of Seeff, notes how luxury property sales in Dubai are contrasting with the slowing pace in many luxury markets worldwide.
The 2023 Knight Frank Wealth Report reveals a staggering 225% surge in property prices since the pandemic lows in late 2020, with an impressive year-on-year price growth of 48.8% for 2023 compared to the previous year.
The sense of optimism in Dubai is undeniable and infectious, both in its economy and its property market. This sentiment was echoed by Seeff during the grand opening of Seeff Dubai, an event graced by the presence of a Dubai Royal Family representative, the South African Consular General, a quick visit from the South African Ambassador, and various other dignitaries.
Why Are Luxury Property Sales in Dubai Booming?
Samuel Seeff calls the remarkable surge in luxury property sales in Dubai a "golden phase" the city is currently experiencing. This boom is driven by an influx of approximately half a million new residents alongside a wave of buyers and investors. In the face of global uncertainties and economic challenges, wealthy buyers are viewing Dubai not only as a stable haven but as a burgeoning investment opportunity.
As a central hub in the Middle East, Dubai also boasts a particularly vibrant rental market. This market is known for offering some of the highest yields on rental investments globally. The level of interest in Dubai’s real estate is staggering, as evidenced by events like Azizi Developers selling out an entire tower block on its launch day.
This rally in Dubai’s property market has significantly depleted the excess stock of properties, notes Nombasa Mawela, licensee for Seeff Dubai. In response, new developments are emerging to meet the substantial demand for rental housing. These developments offer exceptional payment terms and rental yields, making them especially attractive for South African investors.
Why Invest in Luxury Properties in Dubai?
Nombasa Mawela shares that Dubai’s investment opportunities can give you a foothold in the global market. With the introduction of the Dubai Golden Visa, buyers can relocate to the city more easily than ever before, as the Golden Visa gives the visa holder and their family the chance to live in the country for up to ten years.
- Offshore Banking Opportunities. The ability to open personal and business offshore bank accounts in Dubai is a significant advantage for property investors.
- Mortgage Finance Accessibility. Property buyers can secure mortgage financing for up to 75% of the purchase price. Additionally, many developers offer attractive alternative payment plans and low-risk financing options, which are especially beneficial for South African investors.
- These plans require low upfront investment and periodic payments and often come with a guaranteed return on investment for rental properties.
- Investment Flexibility. Investors don't need to opt for residency immediately and can invest in Dubai's lucrative property market with a relatively straightforward process. For example, pricing for a studio unit in the new MAG330 development starts at around R3.5 million, offering a range of options from studio to three-bedroom apartments.
- Ideal for the Rental Market. The MAG330 development is particularly suited for the rental market, featuring five-star amenities like a sky lounge, swimming pool, health club, kids' play area, and a prime location in the new luxury urban area, “City of Arabia”.
- Attractive Investment Plans. The MAG330 development offers a signing discount of up to 4% on the purchase price for a limited period, with a 24% down payment and interest-free payment tranches thereafter.
With a rental yield of 7% to 8%, it is estimated that investors would ultimately pay only about 66% of the purchase price, the rest being financed by rental income.
Nombasa Mawela underscores the vital need for South African investors to engage with trustworthy Property Practitioners. These professionals are instrumental in assessing the suitability of developments for local buyers and investors.
To explore investment opportunities, please get in touch with Nombasa Mawela. She can be reached via email at Nombasa.mawela@seeff.com or by phone at +971562440585.
Alternatively, you can contact the Seeff Dubai office at +97148746556 or +971562440585.
