The concerns on anticipated changes in the UK non-domicile tax law is leading to an influx of American buyers relocating from London to the UAE, an industry expert said.
This, along with the continued spike in demand from international investors, will keep demand for prime and super-prime luxury properties in Dubai strong in the last quarter of this year through to 2025.
The limited availability of ready-to-move-in prime or super-prime homes, especially in sought-after Dubai neighbourhoods by the global wealthy such as Dubai Hills, Emirates Hills, and Jumeirah Bay Island, is emerging as a matter of concern, George Azar, Chairman and CEO of Dubai Sotheby’s International Realty, said.
This, on the other hand, is helping to drive off-plan sales in new projects with strong brands, quality, or development components – often beachfront properties,” he said.
“People want to be on the beach, by the canal, and close to the city,” Azar, who is also the top executive of UK Sotheby’s International Realty and Saudi Arabia Sotheby’s International Realty, told Arabian Business.
The Sotheby’s International Realty top executive said the Dubai residential market remains very positive, especially for luxury properties.
“Roughly 70 per cent of our buyers are international, with 60 per cent from continental Europe – British buyers making up almost 40 per cent of that – 20 per cent from Russia, and the remainder from around the globe.
“The UK’s non-domicile tax law has also led to an influx of American buyers relocating from London to the UAE,” Azar said.
Before the July general election in the UK, the Labour Party pledged to toughen the then proposed Tory plans to abolish non-domicile tax status.
The Labour plans included removing a 50 per cent discount for non-domiciles bringing foreign income into the UK in the first year [as per the Tory’s proposed new rules] and including foreign assets held in a trust within the UK inheritance tax framework, as part of its moves to raise an additional £1 billion to fund public services.
Critics of the plan argued the changes could prompt wealthy foreigners to simply leave the UK.
Chancellor Rachel Reeves is expected to clarify the government’s policy as part of the Budget on October 30.
Change in mortgage rates not to impact high-end buyers
Azar said the expected further cut in mortgage rates will not make any difference for high-end buyers or add to any further spike in demand for properties in this segment
“No, I don’t think so. Our clients are cash buyers; mortgage rates don’t affect the luxury market,” he said.
The Dubai residential market remains very positive, especially for luxury properties, according to Azar.
“However, available land in prime areas, particularly beachfront, has become extremely limited,” he said, adding that foreign developers may have lost access to this land bank.
Azar said while these locations are scarce, the influx of high-net-worth individuals into Dubai has skyrocketed, including in registered family offices in DIFC which have a net worth of over $1.2 trillion.
“This influx of wealth starts in Dubai’s financial sector – banks, family offices – all coming to Dubai to establish themselves and needing homes.”
The chief executive of Sotheby’s International Realty, which collaborates closely with Sotheby’s auction house, sharing a permanent desk in their London office and actively cross-sell and refer clients, creating a synergistic relationship, said the buyers in the high-end segment are individuals who generally are very discerning and have high expectations for their residences.
“They’re choosy and specific. They understand quality but aren’t willing to pay any price.
“So, we believe the market will stay strong as long as developers price smartly and don’t overcharge,” he said.
Dubai residential demand stays strong
Azar said the Dubai residential real estate market, especially the higher-end segment, will see strong growth in 2025 as there is strong and continued demand from buyers – both for end-use and for investments.
He said Dubai boasts one of the world’s largest rental markets. Renting a super-prime villa can cost AED 12 million annually – that’s a million dirhams a month.
“And there are buyers willing to pay for it. Investment buyers are drawn to these impressive rental incomes, while end-users prioritise brand, service, developer reputation, and build quality. Both drive the market,” The Sotheby’s International Realty chief executive, who is well versed with the realty sector in the UAE, Saudi Arabia and the UK chief executive, said.
He also said there are many luxury branded residences in the pipeline, adding a cautionary note: “But frankly, the majority of these residences aren’t what they claim to be”.
“True sophistication comes from brands offering comprehensive services, hospitality, and dining.
“Simply having a brand name isn’t enough to deliver the super-prime lifestyle these buyers seek,” Azar said.
He also said there is a strong market for penthouses and apartments in Dubai, citing the example of Dubai Sotheby’s International Realty’s sales at the Four Seasons DIFC.
“Downtown developments, and the One & Only Zabeel – branded, furnished apartments with service management are always popular in Dubai due to limited supply.
“The Four Seasons, for instance, has only 52 apartments, and the One & Only just 99 – very exclusive,” Azar said.
The top executive of Dubai Sotheby’s International Realty said these properties are defined by their architects, interior design, high-quality finishes, and exceptional service, ensuring lasting market appeal.
“More branded residences are coming soon, some of which we’ll be launching ourselves,” he revealed, not disclosing more details on them.
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