Dubai luxury home market soars as world’s rich flee pandemic – fr

Dubai luxury home market soars as world’s rich flee pandemic – fr

DUBAI, UAE – After nearly three decades in London, Christophe Reech had had enough of the city’s pandemic lockdowns. This spring, he sold his luxurious townhouse and flew to the Sheikhdom of the Dubai Desert to start a new life with his family.

There was no turning back, he said. The very wealthy foreign friends of the French business mogul were doing the same, leading to an unprecedented increase in sales of Dubai’s most exclusive properties.

“Here in Dubai, there is only one strategy: business as usual,” said Reech, chairman of an eponymous group that owns real estate and fintech companies. The philosophy is simple: “Let’s make sure everyone is vaccinated and keep everything open.”

“Of course it attracts people like me,” he said.

As vaccines spread unevenly around the world and waves of infections force countries to expand restrictions, cash-laden foreign buyers have flooded the high-end real estate market in Dubai, one of the few places to the world where they can dine, shop and do business in person.

They are grabbing a record number of luxury villas and penthouses, driving prices up in this booming market.

Sales of once-slow high-end properties in Dubai climbed 230% in the first quarter of 2021, compared to the same period last year. Prices in some high-end areas have increased by 40%, according to Property Finder, the country’s largest real estate website.

A record 90 properties worth 10 million dirhams each ($ 2.7 million) changed hands last month, down from 84 in March, surpassing highs reached eight years ago, according to the firm. real estate consultancy Property Monitor. For comparison, there were 54 such transactions in the year 2020.

“Tons of people are coming in and buying multi-million dollar properties on the spot, without any due diligence time,” said Matthew Cooke, partner at Knight Frank consulting firm, which manages penthouse sales on the man-made archipelago. of Palm Jumeirah in Dubai.

As in previous cycles, cash buyers began to snatch homes at bargain prices and flip them for profit. Analysts say this will continue until prices rise too high and yields decline.

How long does the craze last and what awaits the city dotted with skyscrapers remains unclear. Home prices continue to fall into mid-range levels in the city’s saturated real estate market, which has seen values ​​drop sharply from highs reached seven years ago due to excessive construction. Average selling prices for residences in the Burj Khalifa, the world’s tallest building, slumped to $ 400 per square foot this month, from $ 1,300 in 2013.

“The market is going through a boom period… but people are very aware that Dubai can operate too fast and everything collapses,” said Jackie Johns, partner at Premier Estates, a subsidiary of Christie’s International Real Estate, referring to the debt crisis that brought the city to its knees in 2008.

The hot streak in the luxury market is not unique to Dubai, as ultra-low interest rates and families’ desire for more space have seen the wealthy in cities like New York and Paris decamp to suburban mansions. But there are other factors at play in the glitzy emirate, home to long-haul carrier Emirates and the tallest tower in the world.

Since it first reopened to tourists last summer, Dubai has billed itself as the most pandemic-prone resort in the world. Without a mandatory one-day quarantine, foreign visitors are now partying in Dubai’s bustling bars and beaches, their selfies in resort hotels and helipads sparking resentment in their homes.

The influx of tourists contributed to the dramatic rise in coronavirus cases in the country in January, prompting the UK to suspend flights. But the United Arab Emirates, with its young population and low death rates, has held up relatively well during the pandemic. The country of more than 9 million people, which relied heavily on the Chinese state-backed Sinopharm vaccine for its inoculation campaign, administered 10.6 million doses of the vaccine.

A global financial center known as an oasis in the volatile Middle East, Dubai has long benefited from capital flight. The owners of Palm Jumeirah – who saw 43% of all April transactions – include Afghan warlords and the political elite from countries like Nigeria, Syria and Lebanon, all looking for a place safe to park their savings.

Now, a large portion of the wealthy buyers in this man-made archipelago, popularly known as the Palm, and other exclusive villa communities in Dubai come from Europe, India, China and Russia, looking a better quality of life as the pandemic rages on.

In March, the Palm recorded its second-highest residential sale on record when a Swiss family bought a waterfront mansion for $ 30.2 million. Last month, an unidentified European family bought the city’s third most expensive house for $ 28.6 million.

Abundant vaccines underpin this demand. While there are questions surrounding the effectiveness of the Sinopharm shot, Dubai offers other options, including Pfizer-BioNtech and Oxford-Astrazeneca. To get a shot, all you need is a residency visa – which the city already offers to high-end real estate buyers and investors.

Reech, who plans to buy land in Dubai to build his dream house, made an appointment with Pfizer immediately after obtaining his residency. In the UK, he said, he would have to wait another four months.

New initiatives to attract wealthy foreigners include remote work visas, retirement visas and long-term, renewable “golden” visas. In an unprecedented move, the authorities are even offering Emirati citizenship to a select group of foreigners. To strengthen its brand as a cosmopolitan city, the UAE also changed its strict Islamic legal code, allowing unmarried couples to live together and non-citizens to follow foreign divorce and inheritance laws.

Dubai’s vision for post-pandemic high life has gained traction as foreign investors seek to “play a favorable role in economic recovery,” said Robert Mogielnicki, resident researcher at the Arab Gulf States Institute in Washington.

And even if the market’s meteoric rise collapses, the rich should not bear the brunt of the fallout, analysts say. If anything, the pandemic has shown that the world’s big thieves thrive in crisis.

“The people who lose are at the bottom,” Mogielnicki said.


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