The request «to buy property in Dubai» is now so popular that huge queues are forming for the chance to buy it. This applies to all segments, including luxury real estate. Read our article to learn about the demand for and prices of luxury real estate in Dubai, popular areas for buying luxury housing, and upcoming projects in this industry.

In December 2022, Dubai completed the largest residential land deal in the Emirate’s history: Metropolitan Premium Properties and Mallorca Properties paid $187.6 million for three plots at Dubai Marina. And this is just one example of the current high demand for Dubai real estate.

For the segment of luxury real estate, the previous year was also very successful: from the 3 quarter of 2021 to 3 quarter of 2022, the price increase for luxury real estate was 88.9%. And this is the highest growth in the world.

CEO of Golden Brown Group Tatyana Burlakovskaya predicts that demand for real estate in Dubai will remain high in 2023: according to her, the Emirate’s authorities are doing everything to attract the best minds from around the world; they are making huge investments in infrastructure, improving the investment climate and conditions for entrepreneurs.

In this text, you will find expert answers to the most important questions: how much you can buy luxury properties in Dubai at the moment; what areas of Dubai are the most popular in terms of buying luxury properties; how the process of buying luxury property by foreigners; what innovations to expect in the coming years in the luxury segment of Dubai real estate, etc.

Мировой финансовый кризис и рынок недвижимости в Дубае. К чему готовиться покупателям и инвесторам?

«Twenty years ago, foreigners could not buy local real estate»

— The bulk of property buyers in Dubai are foreigners. In 2022, the top 10 nations that purchased Dubai real estate the most frequently were China, Canada, Russia, Lebanon, Italy, Britain, France, and Germany. 

In the last quarter of last year, the Russians took first place for the number of transactions. It is understandable: Dubai is one of the few countries where there are no restrictions due to nationality. Therefore, many Russians are moving there for business and for permanent residence.

Importantly, the Emirate attracts a huge number of tourists from all over the world — before the pandemic, about 17 million people came here every year. Although the numbers dipped in 2020, they are now slowly returning to their previous levels. According to preliminary estimates, the flow of tourists in 2022 will be about 10 million.

It is important to note that the majority of the population who visit this location are pretty wealthy. According to estimates by the World Travel and Tourism Council (WTTC), last year tourists spent nearly $30 billion in Dubai.

An interesting fact: 20 years ago, foreigners were not allowed to buy local real estate. Whereas now, Dubai has over 60 freehold areas in which representatives of non-GCC countries can easily acquire both housing and commerce. In the remaining areas, they can rent real estate for up to 99 years without having the right to buy.

Where do the most foreigners live? Top 10 countries and up-to-date analytics

«In terms of money, the real estate market grew by 60%»

— As everywhere else, the elite real estate becomes due to the high quality of construction, intelligent design concept, view characteristics and, of course, the location.

As for Dubai, demand for local real estate remains high. From January to November 2022 (no newer data is available yet), more than 88,000 transactions were closed, an increase of 32% over the 11 months of 2021. In money terms, the real estate market grew 60%, to $65 billion. 

In some projects, lots are sold out in a few hours or even minutes — the developer releases a pool of apartments, for each of which there are already several buyers.

Among apartment buyers, we can observe a pronounced preference for the coastal «mega-district» Jumeirah. It includes a range of luxury and resort areas, including Dubai Marina, Palm Jumeirah, Downtown Dubai, Business Bay, Barsha Heights, Emirates Hills, Jumeirah Beach Residences, Jumeirah Lake Towers, and others in the same area. 

Among buyers of villas and townhouses, such locations as Dubai Hills Estate, Arabian Ranches, DAMAC Hills (Akoya by DAMAC), Town Square, Wadi Al Safa, Al Barsha, and The Springs are most in demand.

In general, in the next few years, a lot of remarkable projects will be implemented in Dubai. Among them is, for example, a project by Meraas on Bluewaters Island, built near Dubai Marina. Apartments there will begin at 18 million dollars. But it is an ultra-luxury project. 

Another interesting complex from the company Omniyat located in Palm Jumeirah — from $6 million for 2-bedroom apartments. In general, since locations on the first line are already developed, projects on the Palm Jumeirah currently have the highest level of interest.

«In Dubai, you can resell an apartment without paying the full price»

— The average price of new business-class residential real estate in Dubai is $5,700 per square meter (up 19% year-on-year). In the high-end segment, prices are 2-3 times higher. This is a lot, but it is still less than in other world megacities such as London, New York, and Paris. 

The average transaction budget for buying apartments in Dubai is $500,000; townhouses cost $600,000; and luxury villas cost $2–3 million. There is no such thing as a ceiling price. It should be noted that buyers are more interested in apartments because it is very difficult to equip the area around the house in the hot Dubai climate.

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The proportion of investors and end-users in the Dubai real estate market is divided 60:40. The profitability of housing in the emirate for short-term rentals is 10%; in the long term, it is 5-7%. It is noteworthy that in projects run by hotel operators, the developers stipulate in the contract a minimum amount of guaranteed rental income from the apartment, which is typically between 5 and 10% annually. 

At the same time, you can earn many times more on resale, up to 20%, but it all depends on your investment strategy. In Dubai, you can resell an apartment without paying its full value (about 30–50% of the amount). It is most profitable to sell at the last stage to the final customers who are almost ready to buy the project for their own residence or lease. 

But you need to carefully select the project and the investment strategy. There’s no need to think that all real estate in Dubai brings a high income. If you come to the project with only investors or in a bad location, you might not get the expected income. There is no need to harbor any illusions.

«Buyers in Dubai are well protected from dishonest players» 

— To buy property in Dubai, you must have a passport, visa, and address of residence in the Emirate; if the buyer can not attend in person, he needs to make a power of attorney to his representative.

The procedure for buying property in Dubai for foreigners is quite simple, although it has a number of nuances. To begin, the object must be located in so-called Freehold Zones, where it will be fully possible in the future not only to use and own it, but also to sell, give, lease, and transfer by inheritance.

After selecting a home and paying the deposit, a Memorandum of Understanding (Contract F) and a No Objection Certificate (NOC) must be signed. If a lot is purchased in a building under construction, an Initial Contract of Sale must be signed instead of the above documents.

Then the contract of sale and registration of ownership is signed — in Arabic and English. It does not have to be notarized.

The address of the property, its value, the order of settlement between the parties to the transaction; the conditions and timing of the transfer of real estate, and, if the property is purchased in a project under construction, the term of completion of construction and the developer’s liability for breach of the term of delivery into service are all reflected in the contract of sale.

Transfer of ownership is processed at the Land Department of Dubai (DLD), which also issues a new owner of the housing Title Deed.

Here are a few more important points:

Firstly, the UAE laws do not allow purchase and sale transactions without intermediaries; they help to understand all the intricacies of the process, prepare a package of documents, and overcome the language barrier. The actions of realtors in the emirate are strictly regulated by the Real Estate Regulatory Agency (RERA) and the Dubai Land Department (DLD).

Secondly, sales transactions are mandatorily registered at the Dubai Land Department, and all investors’ funds are kept in special escrow accounts. If the company, for whatever reason, cannot complete the construction, the Land Department of Dubai must find another developer or return the money to the buyers, which they contributed to the escrow accounts.

All this shows that the buyer of real estate in Dubai is well protected from unscrupulous players.