(MENAFN- Khaleej Times)
The Dubai property market is facing a shortage of luxury apartments, according to Real estate experts. This has driven up the rental costs of such existing apartments tremendously.
“We don't have many luxury apartment projects that are ready at the moment,” said Vladimir Minaev, luxury property specialist at Metropolitan Premium Properties. "We only have four or five truly very luxurious options on the market. So when high net worth individuals (HNWIs) move to the emirate, many of them choose to rent while they look around and find a locality that works best for them. Since these properties are hard to come by, the rates are also quite high.”
A prime example of this growing trend is a recent rental deal involving a European HNW family, who paid Dh4.4 millio for a 10,000-square-foot penthouse at The Royal Atlantis Resort & Residences on Palm Jumeirah. This is believed to be the largest single-unit rental agreement in Dubai's history. The penthouse, which includes four bedrooms, a library, an exercise room, and comes fully furnished, appealed to the tenants for its high-end amenities, hotel concierge services, and turnkey readiness.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
Rohit Bachani, co-founder of Merlin Real Estate, highlighted the evolving definition of luxury, stating:“The concept of 'luxury' has also expanded beyond its traditional meanings,” he said.“Today, it's not just about opulence. It's about the lifestyle, the connections, the amenities, and a strong sense of identity. The influx of HNWI into the country is further diversifying the market.”
'The options are limited'
The property market has struggled to keep up with the demand, observed Jeff Raju Kuruvilla, CEO of Manifest Real Estate.“With the influx of HNWI in Dubai in recent years, the need for luxury segment apartments have grown,” he said.“Demand has outpaced the supply. Buyers require properties in specific location with architectural uniqueness and high end amenities. Although top developers launched some unique projects in 2024, it could not keep up with the demand.”
He added that off-plan properties in the luxury segment“are selling within few hours” of being launched and that these properties are“selling in secondary market at premium” costs.
Vladimir said that one reason for the demand was that luxury properties were rarely put for rent.“People normally don't rent luxury properties,” she said.“They normally buy and then sell it. So there are not many options available. If you were looking for villas, it would be easier to find but in the penthouses category, the options are very limited.”
Jeff added that the returns on such properties were also very high.“Luxury segment is still enjoying a rental yield of 5 to 7 per cent which is attracting new investors to invest in established areas like Palm Jumeirah, Downtown, Business Bay,” he said.“In recent years, a new trend has dominated Dubai's property luxury market-branded residences. These have also become one of the most sought-after segments in Dubai's luxury real estate.”
MENAFN23122024000049011007ID1109025877
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.