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With a recent report stating that the UAE will welcome 6,700 millionaires by the end of the year, REM TIMES gauges the impact that the move will have on the nation’s real estate
August 14, 2024 | Deepa Natarajan Lobo | UAE | Developers
The UAE has always been the dream destination of many professionals and investors across the globe. In fact, as per a report by international investment firm Henley & Partners, which came out in June, the nation is all set to welcome 6,700 ultra rich migrants by the end of 2024. The ‘Henley Private Wealth Migration Report 2024’ also states the UAE’s tax-free income, golden visa residency programme, and its geographic location have made the country a top choice for migrating millionaires. REM TIMES gauges the impact that the move will have on the nation’s real estate.
The report also indicates that the UAE has consistently drawn a significant number of millionaires from India, the Middle East, Russia, and Africa and that this year, it will attract nearly twice as many millionaires as the USA, which is projected to receive an inflow of 3,800 millionaires. “With its sights firmly set on becoming the world’s top wealth haven, the UAE is pulling out all the stops to attract millionaires, from an attractive golden visa offering and luxurious living to a business-friendly environment in a strategic location,” says Dominic Volek, Group Head of Private Clients at Henley & Partners, in the report. “By attracting wealthy residents and their capital, key sectors such as real estate, renewable energy, technology, and tourism tend to flourish,” he adds.
Real estate experts believe that the move will definitely increase the demand for luxury properties in the nation. Says Istvan Juhász, Co-Founder & CEO of PropTech firm Shard, “This surge will lead to higher rental yields and greater capital appreciation. Investment-minded customers can diversify their portfolios through the various co-ownership models offered by firms, such as ours, with strong price appreciation and high rental yields, allowing them to invest in multiple properties with the same amount of capital, thereby minimizing risk. This trend will solidify the UAE's status as a premier destination for luxury real estate investment.”
Luxurious Rentals
The upscale sector is poised for significant growth, foreseeing a surge in demand for luxury properties in exclusive neighbourhoods such as Palm Jumeirah, Emirates Hills, and Downtown Dubai, observes Mona Jalota, Founder and Managing Director of Krypton Global Investments, an investment firm that specialises in real estate. “As affluent individuals seek opulence and comfort, developers are gearing towards crafting lavish residences with top-tier amenities to meet these discerning tastes,” she points out and adds, “This influx of High-Net-Worth Individuals (HNWIs) is set to reshape the rental market, driving an escalation in prices and a distinct shift towards larger, more luxurious units to accommodate this affluent demographic.”
Marcus Andersson, Director of Sales, Penthouse.ae, the luxury division of the prominent real estate brokerage firm Metropolitan Premium Properties, believes that the anticipated influx, coupled with delays by developers handing over news units, may contribute to price increases. “With prime areas like Palm Jumeirah and other beachfront locations experiencing a supply shortage, these cash-rich investors prioritize larger, high-quality properties and are willing to pay premiums to secure their desired homes,” he says. According to him, HNWIs are unfazed by high inflation and interest rates elsewhere and continue to seek premium properties in established communities like District One, Dubai Hills, Emirates Hills and Jumeirah Island, further pushing rents upwards. “While there may be some geopolitical challenges, the overall outlook for Dubai’s luxury rental market remains highly positive,” he concludes.
