Dubai – A Prime Destination That Attracts Wealthy Buyers Amid Rising Costs
Despite rising costs, Dubai continues to captivate wealthy investors. The annual Julius Baer Lifestyle Index, which analyzed cost-of-living data from 25 major cities, revealed that Dubai remains relatively affordable for high-net-worth individuals despite a 4% increase in the average prices of goods and services.
Middle Eastern Affluence and Dubai’s Property Market
Dubai secured the 12th spot in this year’s global rankings and ranked sixth in the Europe, Middle East, and Africa (EMEA) region. Although it dropped slightly from seventh place globally last year, Dubai’s competitiveness in the luxury real estate market remains strong.
“Dubai’s tourism sector has rebounded dramatically post-COVID-19,” the report states. “With an 11% year-on-year increase, overnight visitors are expected to surpass 20 million in 2024, contributing around 12% to the GDP. The city is also positioning itself as a new global financial hub, bridging East and West with a blend of traditional and digital economies.”
Surging Real Estate Prices and Continued Popularity
The report highlighted a significant 16% rise in property prices in Dubai over the past year in US dollars. Despite this surge, the Dubai real estate market remains a favorite among wealthy Middle Eastern buyers. Over half of the Gulf’s affluent residents reported increased spending on luxury homes in Dubai.
Sophisticated investors recognize Dubai’s property market as a wise investment due to capital appreciation and relative affordability compared to other global financial hubs.
“This growing trend will keep Dubai on the global investor’s radar. Over half of wealthy Middle Easterners have increased spending on residential property in the past 12 months, with 58% planning to spend more in the coming year,”.
Low Taxes and Strategic Location
Dubai’s appeal is further enhanced by its low taxes, economic and political stability, and strategic location, making it an ideal base for families and entrepreneurs. The city’s emergence as a premier business gateway between East and West adds to its attractiveness.
High-Net-Worth Consumption Patterns
The Lifestyle Survey within the report showed that high-net-worth individuals in Dubai spend significantly on luxury items like designer smartphones, clothing, shoes, watches, and handbags. Business and leisure travel within the Middle East has also seen a substantial increase over the past year.
The study revealed that wealthy individuals in the Middle East exhibit a more risk-tolerant investment approach and a bullish outlook. “The Middle East, led by GCC countries, should continue to enjoy fiscal and current account surpluses. Inflation remains low compared to other emerging markets,”.
According to the latest Global Wealth and Lifestyle Report, Dubai is well-positioned to maintain its status as the wealthiest city in the MENA Region, offering a unique blend of opportunities, comforts, and advantages that attract wealthy regional residents.
