Especially in a desert.
The rally in Dubai luxury villas has been as swift as it has been spectacular since the autumn of 2020, with anecdotal evidence of 50 to 70% cumulative price rises. Constructed villas were a mere 20% of the Dubai housing stock after the protracted six-year bear market that saw prices plunge by 40 to 50% since their 2014 peak, obviously creating assets that were available far below their replacement cost and with stellar rental yields, even though the local market was illiquid and many developer balance sheets were not exactly hunky dory – au contraire.
Yet the pandemic led to a spike in demand for luxury villas from HNW families desperate to take advantage of Dubai’s golden visa, public health protocols, digital/sunrise industries and traditional status as a geopolitical safe haven, known to its feeder markets since the Iranian revolution/Lebanese civil war/Zia coup in Pakistan in the 1970s, the collapse of the USSR and corrupt ANC rule in South Africa in the 1990s and Arab Spring inflows in 2011-2012.
