2023: Dubai’s luxury property market outlook

Dubai’s luxury property market

2022: a record-breaking year for Dubai’s luxury property market.

Laguna Properties, like many other firms in the sector, commented on Dubai’s ‘Golden Run’ in real estate in 2022, with year-on-year growth reaching a record 89% during Q3 of 2022. Many factors, ranging from rising inflation, an influx of Russian investors and Dubai’s visa reforms created a perfect environment for growth. Furthermore, 2022 saw the highest ever number of transactions recorded above the AED 100 million, with 16 transactions recorded in 2022, compared to only five transactions in 2021.


Was 2022 an artificial bubble, or can we expect more of the same in 2023?

Dubai is certainly heading out of the gates strongly and growth is still on the agenda. Among the 25 largest luxury real estate markets globally, Dubai currently ranks first in popularity amongst the high net worth community, with Knight Frank expecting an increase of 13.5% in premium prices over the year ahead. Within Dubai, neighbourhood areas such as The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island are high on customers’ lists.

The Laguna team is confident that the outlook remains positive for buyers in Dubai over the next 12-months, with Founder, Hamed Ghavidel commenting, ‘we are still seeing high volumes of new residents to Dubai, especially from the Russian market, attracted by Dubai’s ongoing status as a credible global destination with a ‘safe haven’ status. We therefore expect demand for the prime and ultra-prime market to continue, bolstered from the ‘billionaire migration’ trend.

Ghavidel continues, ‘It is also important to remember that Dubai is still viewed as ‘accessible’ in contrast to other major global hubs such as London or New York, with prime home prices of around $800 per square feet. This makes Dubai one of the most affordable luxury residential markets in the world and reassures us that there is plenty more growth ahead.’


A challenge for Dubai’s luxury property market is supply.

A major challenge to the market is a lack of supply, with a slowdown in new project launches. Whilst a lack of supply keeps prices high, it deters would-be investors and dents Dubai’s credibility as a live-able city, through a disproportionately high cost of living. Major recent launches have included Bluewater’s Bay on Bluewaters, Seascape at Rashid Yachts and Marina, Nad Al Sheba Gardens and Elysian Mansions. However, these off-plan projects are aimed at investors, over end users, meaning stock is at a premium.


Short term rental market is on the up.

The influx of tourists following the World Cup in Qatar and the bounce back in international travel since the ending of the pandemic demonstrated the strength of the short-term rental market. Laguna is now pleased to offer short term rents through its sister company, Laguna Living. Hamed Ghavidel comments, ‘A key trend in the luxury market for 2023 that is often overlooked is the performance of short-term lettings. This model can offer investors an impressive yield, with a market representing discerning travelers looking to take advantage of the increased privacy and flexibility that an apartment offers, and also avoid the high costs of five-star hotels. We are also excited to see the return of travel from China, which is an incredibly important market for Dubai’s tourism and real estate sector.’

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