Affordable luxury: bridging the real estate gap in Dubai
Dubai stands out, among urban centres globally, as acting to implement a particularly future-ready vision. The city is in the midst of a concerted drive to develop technology-led capabilities and state-of-the-art infrastructure. For some decades now, it has also earned a well-deserved reputation for being home to impressively luxurious real estate. Within the context of a buyer’s market, this propensity to manifest the highest standards in modern living is giving rise to an ‘affordable luxury’ segment in real estate that seeks to provide the entire spectrum of modern conveniences and amenities, at a highly competitive price point.
Few if any cities in the world embody an aspiration for material abundance, as unselfconsciously as Dubai. The city has an identity that embraces commercial prosperity, the status of a globally unique tourist attraction and being a hub of lively corporate activity. Dubai’s resident population has increased at a rapid rate, with the influx of a large expatriate population keen to pursue career opportunities. The city’s inherent dynamism and growth opportunities act as a beacon for those with energetic personal ambition, which in turn reinforces Dubai’s identity as ‘the city of dreams’. It is only natural then that living a prosperous life which reflects personal success, is an inclination for a significant section of residents.
With the confluence of several factors, such as a firming US Dollar and a steady supply of available units, the Dubai real estate sector is in the midst of a phase that can justifiably be deemed a buyer’s market. The city’s developer community has adapted to this trend by offering very compelling financing options to potential customers as well, further underscoring the trend. Gemini Property Developers CEO Sunil Gomes believes that the Dubai’s sense of comfort with enthusiastically adopting the best of emerging innovations is, very organically, creating the space for an entirely new segment of real estate property. In his opinion, the term ‘affordable luxury’ might have been a contradiction in terms in the past, but this is no longer the case. Sunil believes that Dubai is essentially leading in manifesting a new ‘normal’ and a standard of convenience and lifestyle that he believes reflect the best of what modern living has to offer.
The emergence of a new demographic of aspirational buyer
Real estate trends, in any location, tend to reflect a complex array of social, economic and psychological factors. As the economy diversifies further, Dubai is becoming home to an ever-expanding class of middle-class and upper-middle-class professionals. The millennial generation is a particularly active component in this segment, and it’s not surprising that their needs and aspirations are becoming a defining force for businesses in Dubai, including the real estate market. Property portal Dubizzle reports that this demographic of buyer is often using keywords on their platform that reflect higher expectations than previous generations (1). Based on the activity on the site, the business reports a much higher incidence of prospective buyers looking for holistic living spaces, including facilities such as swimming pools, landscaped and picturesque outdoor spaces, and other features that were typically associated with the ‘luxury’ end of the real estate spectrum, in the past. This convergence of aspirational buyers and proactive, customer-focused developers is the primary driver behind the emergence of ‘affordable luxury’.
Sunil contends that terms such as ‘affordable’ and ‘luxury’ are inherently relative, rather than quantifiable in simplistic metrics. In Sunil’s opinion, whatever the emerging trend be labelled, it is essentially a reflection of a demographic of buyers who are prepared to pay more for personalised services and products that reflect their aspirations and self-image. Sunil considers the heightened expectations of buyers as part of an overall maturing of what customers demand in fields as diverse as retail, tourism and entertainment. Sunil believes that if developers can be resourceful in delivering well-appointed communities, which incorporate a groundbreaking standard in facilities and features within an attractive price range, they will be able to induce buyers to purchase properties in a higher price bracket than they might have previously considered i.e. developers should look at attracting buyers into considering higher price brackets by delivering properties that offer a much higher standard of living for a little more outlay – the sweet spot of luxury and aspiration intersecting needs and budgets.
Signs of a maturing market and redefined possibilities
We are living in an era in which technology is redefining every aspect of our lives at a breathtaking pace. Quite obviously, we are entering a phase of human civilisation in which many of the standards of the past will be exceeded and made irrelevant. With trends like Smart Buildings, Smart Cities and application of technologies such as AI, IoT and 24/7/365 connectivity becoming core to the new world we will inhabit, an entirely new kind of home can now be conceived and delivered. In the case of Dubai, these trends are actively shaping its real estate market, and coming key drivers for its success. The city is becoming much more than a location that presents lucrative opportunities to investor buyers. Bayut’s Q1 2019 report shows a buyer emphasis on amenities that are driving Dubai’s emergence as the epitome of a modern metropolis setting the standards in lifestyle and livability(2).
Sunil believes that Dubai’s transition from being recognised as a dynamic commercial epicentre to a happiness-focused and people-centric modern urban centre is resulting in a more mature and stable real estate market. In Sunil’s opinion, as the city continues to don the mantle of a future-ready global metropolis, Dubai will attract a high percentage of aspirational and ambitious professionals, who will further expand the ‘affordable luxury’ segment of the market.