Wealth-X and Sotheby’s International Realty have released a new report describing Dubai as an up-and-coming destination for ultra-high-net-worth individuals (UHNWI) looking for luxury real estate.
“Dubai, the largest city in the United Arab Emirates, has rapidly become home to an array of luxury stores, grand hotels and a large array of fine dining and entertainment,” states the report – titled “The Europe, Middle East and Africa Luxury Residential Real Estate Report 2015” – which gives an overview of the emirate that is reportedly home to 495 UNHWI and 34 billionaires (more than any other cities in the region).
In addition to its lifestyle, Dubai – often referred to as the “trailblazer” of the Middle East – is home to some of the world’s top sporting and entertainment events, which naturally attract UNHWI, such as the Dubai World Cup – the world’s richest horse race – and the Rugby Sevens, among others. Additionally, the emirate gets about 300 days of sushine a year, a climate that attracts a vibrant lifestyle for UNHW individuals, which directly and indirectly impacts other luxury businesses.
“You have to look at it in relationship to the real estate market because when the real estate market picks up that is a signal that the ultimate luxury lifestyle might pick up as well,” Greg Stinner, CEO of Art Marine ship builder told Aficionado on a previous occasion.
The report discussed Dubai’s trade-focused economy, led by industrial conglomerates and tourism. Given that it does not have the same load of oil reserves as some of its sister emirates and neighbouring GCC countries, the diversity of its businesses has added to its cosmopolitan nature.
The study focuses on UNHW cities that could see strong growth in the near future. These include – besides Dubai – Cape Town and Madrid, which may not yet rival London in the number of its UNHW population, but “can still offer everything a UNHWI may desire”, the report stated, revealing that Dubai came closest to London out of the three cities.
The UK capital served as a benchmark UHNW city in the report. Property in London is priced, on an average, at $3,103 per square foot, Wealth-X states in the report, followed by Dubai, where the average price has been measured at $834 per square foot, then Madrid with $526 per square foot and finally Cape Town, where property is priced at $350 per square foot.
Moreover, property prices in London were “resilient during the global financial crisis of 2008, increasing investors’ confidence and making the UK capital’s real estate a safe haven for UNHWI around the world,” the report explains. This, of course, is in addition to London’s status as a global centre of finance and its elite educational institutions.
The UNHW Residential Real Estate Index, which featured in the report, incorporates data from New York, Hong Kong, London, Singapore, Dallas, Mumbai, Los Angeles, Paris, San Francisco, Washington DC, Palm Beach, Monaco and a composite index for countryside properties around the world.
In Q1 2015, this index reached a record high of 112.1 points, up seven per cent when compared with Q1 2013 and up 3.7 per cent from its previous quarter, signalling strength in the luxury property market generally. However, “the transnational nature for many UNHWI with homes all over the world means that they are impacted just as much by global events as they are by regional ones. The index also provides a framework for evaluating changes specific for the EMEA region,” the report says.