As developers seek to lure billionaires from around the world, Dubai is building a wave of luxury villas and penthouses, some with movie theaters, spas and private elevators.
Prices for these ultra-luxury homes range from $60 million to more than $120 million, drawing a flock of property buyers from Europe, Asia and America. And the furnishings are becoming increasingly lavish, even by Emirati standards.
Contractors shipped huge glass walls from thousands of miles away to provide the ocean views owners wanted. Another built a private lobby and elevator for buyers of one penthouse so huge it spanned two towers. Another designer created a movable floor for a client’s pool that rises for parties and blends in with the garden tiles.
Prices in Dubai’s booming property market are falling after soaring since 2021. But that’s not stopping developers from building luxury new homes in the city’s most expensive waterfront locations.
“The upper end of the market is the most profitable,” said Mark Phoenix, chief executive officer of Sankari Properties, whose company is building a $1 billion ultra-luxury tower. “If done properly a developer can sell for the maximum sort of prices.”
The Dubai market is bucking the global trend, with luxury residential property prices dropping or declining in many other international markets.
According to Knight Frank, Dubai saw a record 435 homes sold last year, worth more than $10 million each, beating New York and Hong Kong. The real estate research firm predicts that prices for ultra-luxury apartments in the UAE have risen about 67% since 2021 and will rise at least another 5% this year.
Wealthy families looking for second or third homes around the world can find more space for the same amount in Dubai. Prices per square meter are one-third lower than in New York and one-fifth lower than in London, according to Mahdi Amjad, founder of ultra-luxury apartment developer Omniyat.
International Benchmark
“We benchmark our buildings against buildings in New York and we find that for similar ticket prices, or maybe lower ticket prices, you get by far more space and by far more experiences and amenities,” said Amjad, who expects to add another 100 ultra-luxury homes this year.
Dubai developers often have to go to extraordinary lengths to compete with international cities.
During a recent visit to the construction site, Bloomberg News witnessed the construction of a huge glass dome in the middle of the mansion. It’s intended to cover the pool and spa, and can be retracted when the owner wants to soak up the sun. Elsewhere, there’s a meandering pool where you can swim from the bar to the spa on the other side of the garden.
Dubai’s artificial islands are popular spots. Villas on Dubai’s seahorse-shaped island known as Billionaire Island usually come with private beaches and parking turnstiles that automatically steer cars in the right direction.
Wealth-management consultancy Henley & Partners predicts that 6,700 billionaires will come to the UAE by 2024, more than any other country.
But catering to the whims of rich countries isn’t cheap or easy.
Adding luxury amenities means “the upfront design costs make construction much more expensive. That’s what scares off a lot of developers,” Phoenix says.
At the home of Wissam Damar, founder of real estate developer Palace Group, a buyer wanted an entire wall of the spacious living room made from a single sheet of glass. It measured 17 by 4 meters (55 by 13 feet) and was the size of several swimming pools. Dammer wasn’t sure he could even find a single disk of that size, much less install it. And the buyer wanted the glass wall to disappear completely at the press of a button, revealing a view of the open sea.
When Dammer contacted Germany’s largest glass manufacturer, the company took 45 days to determine whether it could meet the requirements. The company finally agreed, but only on the condition that another Swiss company could assemble the mechanical system that would move the glass wall. To this end, it was necessary to build a basement into which the giant disk could descend when it was lowered. Due to its size, special permission was required to transport it by boat or truck. The customer finally got the look he wanted.
“Most of our clients have multiple homes in cities across the world and they’re very specific about what they like and what they expect,” said Damaa. He said 15 new villas and 70 apartments are under construction, with a total value of 16 billion dirhams ($4.4 billion).
Despite the ongoing construction boom, real estate agents and developers say the enthusiasm is fading somewhat in recent years. Price growth has slowed and some developers are finding it increasingly difficult to find the best locations to build.
Hany Daylami, managing partner at Dubai Sotheby’s International Realty, said wealthy buyers are resisting price increases after years of price increases, but demand still outstrips supply at the moment.
“The market is still short of supply of ultra high-end that’s ready to move into,” said Deylami, who sold around 2.7 billion dirhams worth of properties last year. “There is a lot of supply in the pipeline or under construction but that’ll require three to four years before it hits the market.”
