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The Times - Inside Dubai’s Soaring Prime Property Market

The launch of the first Mercedes-Benz branded residences, a 65-floor tower in Downtown Dubai, came with all the swagger you might expect from the Arabian city. Over a black-tie dinner, 20,000 people (yes, really) watched Muhammad BinGhatti, the chief executive of the Dubai developers Binghatti, and Britta Seeger, a board member of Mercedes-Benz, arrive on stage in a Vision One-Eleven, the latest Mercedes concept car.

The project they unveiled was Mercedes-Benz Places, a “fusion of automotive excellence and architectural innovation”. A 341-metre tower of 150 homes, all with terraces and private pools facing the world’s tallest skyscraper, the Burj Khalifa. Prices range from $2.3 million (£1.8 million) up to $140 million for the triplex penthouse with a private gym, cinema, spa and 20 — yes, 20 — parking spaces.

Glamour and glitz are nothing new in Dubai of course, but the news that half were sold by the end of the launch demonstrates Dubai’s rarefied status. The world wants a slice of Dubai property.

Maria Morris, chief executive of Maria Morris Real Estate, has sold property in Dubai for the past decade and witnessed the growing international clamour. “The prime market recovered exceptionally quickly after Covid and has not stopped,” she says. “Locations like The Palm, Emirates Hills and Downtown were most in demand but more recently we’ve seen a shift to people coming to live for longer periods than six months, resulting in interest in locations further from the centre too, Dubai Hills and Al Barari for example.”

Knight Frank figures show Dubai was the fourth busiest luxury homes market in the world in 2022, recording 219 deals over $10 million. The city is an established fixture at the top of Savills prime global price index, recording growth of 12 per cent in 2022 and 17 per cent in 2023. Savills placed Dubai second only to Sydney in its forecasts for the strongest property price growth in 2024, predicting a 4 to 5.9 per cent increase, and had the emirate top of its latest executive nomad index, praising its airport connectivity and digital infrastructure, including the world’s fastest mobile speeds.

“Property prices in Dubai have risen around 33 per cent since 2020 and rents by 42 per cent,” says Jackie Johns, the managing director of Christie’s International Real Estate in Dubai. “By initial accounts, 2023 was the busiest year for residential property in its history. The ascent has been driven in large part by an influx of high-net-worth individuals. Last year the UAE welcomed 4,500 millionaires as permanent residents, a number second only to Australia.”

Unlike western countries, the UAE has not imposed sanctions on Russian assets after the Ukraine invasion. While there are no official figures on the numbers of new Russian residents, estimates of up to 500,000 arriving since 2022 are bandied about — one local newspaper renamed Dubai Marina as “Marinagrad”.

Johns ticks off Dubai’s attractions for international buyers: “An automatically renewable ten-year golden visa, low corporate tax, no income tax, visa reforms aimed at encouraging more residents, investments and businesses and projected average GDP growth of 4.25 per cent over the next five years, far above the global average of 2.4 per cent.”

In 2023 cash purchases of property in Dubai reached 82 per cent, a historic high, while year-on-year sales of branded residences increased by 80 per cent. The usual suspects are there: five-star hotel brands including Four Seasons, One&Only and Six Senses, but so too are fashion, luxury goods and motor industry brands.

Bugatti Residences, a curving 45-floor tower in Business Bay with 182 homes priced from $5.2 million, and Burj Binghatti Jacob & Co Residences, both Binghatti projects, are under construction. The latter is a gem-themed tower of 299 homes designed to be every bit as ostentatious as the jewellery Jacob & Co designs for stars such as Jay-Z. As with Mercedes-Benz Places, both projects are global firsts for their brands and due for completion in 2026.

“What better city to celebrate a design icon than Dubai,” Muhammad BinGhatti says. “It has established itself as a global city. We’re very accustomed to luxury here so it’s important to go beyond that narrative. At Mercedes-Benz Places that’s where the heritage, engineering genius and visionary talents of Mercedes comes in. Mercedes designers have been involved at the highest level throughout.”

For Morris, this new level of quality is all part of Dubai’s evolution. “Is ‘super-prime quality’ here yet?” she asks. “It’s definitely moving in the right direction with a clear realisation that quality counts. I expect price increases to continue for the next 12 to 18 months with the question now of where we see future price jumps. Dubai is no longer just one community but has matured to have distinct neighbourhoods.”

Risks remain, notably the Middle Eastern conflict, which could cause oil prices to spike. “As a global economic centre Dubai is vulnerable to global economic shocks,” says Faisal Durrani of Knight Frank. “For now, all the key economic indicators remain firmly in positive territory. Our prime residential forecast puts Dubai as one of the fastest growing prime residential markets in 2024, albeit as one of the most affordable.”

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