Dubai pips London, Miami in second home purchases

Dubai — Dubai has got the most popular city rank for second home purchases amongst global High-net-worth individuals (HNWIs), who accounted for 75 per cent of sales in 2014, according to the latest study by real estate arm of auction house Christie’s.

Dubai, which is home of the world’s tallest tower Burj Khalifa and man-made island Palm Jumeirah, left behind London (44 per cent) and Miami (40 per cent) for international second home purchases, revealed Christie’s International Real Estate, which launched a Dubai affiliate in its first expansion into the Middle East market six months ago.

Titled Luxury Defined, the report stated more properties than ever before were both sold and listed for sale at $100 million or higher in 2014. As the number of billionaires globally reached new heights, so too did the price benchmarks for their trophy homes, as the world’s most affluent focused more and more on acquiring ‘collectable’ residential assets in prized locations across the globe. So $100 million is now firmly established as the billionaire benchmark for ultra-prime property.

The report also mentioned the world’s top 10 “Best of the Best” cities that also include Dubai and other nine top international markets are Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco, Sydney, and Toronto.

Joachim Wrang-Widen, senior vice-president of Christie’s International Real Estate comments: “Dubai is increasingly playing the role London has successfully played for over two centuries, namely being geographically located ‘in the right place’.”

Whereas London allows the financial markets to trade with an overlap time-wise between Asia, Europe and North-America, Dubai is increasingly seen as a stopover point for long-distance travel between Europe and Asia.

The significant growth of Gulf -based airlines and the explicitly stated intention and implementation of not only building the world’s largest airport in Dubai but also expanding it reinforces this trend.

Dubai international airport is already the world’s busiest airport by international passenger traffic and the sixth busiest by passenger traffic overall as well as ranking number six by cargo.

“Passengers transiting through Dubai, motivated initially by competitive airfares, are now more and more motivated to stay for a few days in conjunction with changing flights, and discovering Dubai, deciding increasingly to acquire second homes,” Wrang-Widen said.

For international buyers, the opportunity of acquiring real estate in a market that is characterised by dynamism and an extremely large degree of internationalisation without any income tax or capital tax being levied contributes to international purchasers viewing the Dubai market favourably, he said, adding: “Tax, whilst important, is not ‘making a market’ on its own if the underlying rationale for investing is not present. Dubai satisfies the underlying criteria by being business and investor-friendly, excellent air transport accessibility, leisure-related activities, and being geographically almost equidistant between Asia and Europe. The Expo 2020 has definitely increased the level of interest.”

At the more traditional luxury residential real estate price segments, the overall market experienced steady growth in 2014, with $1 million plus home sales up by an average of 16 per cent over 2013 in the 80 luxury residential markets surveyed for the report.

The third annual edition of the research paper not only examines the world’s top 10 cities for prime property, but also analyses an additional 70 key regional markets, exploring the dynamics and drivers shaping the globe’s high-end real estate market.