A more difficult task than it seems at first glance is to determine what luxury real estate is.
After all, "elitism" is not a certain firmly checked indicator that remains unchanged over time. Such a characteristic is the object of both subjective and objective factors. To determine it, it is necessary to take into account both completely computable economic indicators and subjective demand from buyers.
In this article, we have shown the key features of luxury real estate objects, considering them from all sides.
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The content of the article:
- Luxury real estate from the viewpoint of a modern buyer
- What defines luxury real estate
- How to distinguish elite from other real estate
Luxury real estate from the viewpoint of a modern buyer
It is worth starting with the subjective side of what most buyers today will consider elite real estate. Not just expensive bad taste, interesting, except for getting a status, but something worth fighting for with other potential buyers.
First of all, modern wealthy investors and buyers are interested in unusual locations. They can be both architecturally original, and aesthetically or culturally significant.
At the same time, preference is given to the most modern types of housing, especially the one that is now called "green real estate" - created from materials and with the help of tools that lead to minimal emissions of toxic vapors and harmful waste into the atmosphere and the environment.
In Dubai, such real estate is still a new trend. However, at the moment the city already ranks 14th in the world in terms of the number of such real estate, and the developers plan to actively develop the sector in the next decade.
Buyers are also interested in experimental housing, conquering not by its rough high cost and size, but by its value as an art object. The size, location and price easily fade into the background if the desired object is made manually in collaboration with a designer or architect with a world-famous name.
But in addition to the aesthetic value, the functionality and urbanism of housing is no less important. In recent years, a pronounced trend of urbanization of residential complexes has formed on the market, whether it is suburban cottage settlements or a secluded cluster of villas.
The demand for urbanization among the older generation is particularly pronounced. Urbanization refers to the transformation of residential areas into cities with developed access to public social, economic and cultural benefits. Many residents, not getting what they need from cottage settlements and suburban areas, choose to move to developed urban areas with a well-developed infrastructure.
Developers have long noticed this trend, and more and more residential real estate projects in Dubai are being developed on the principle of "city within a city"— a self-sufficient populated unit that concentrates on a small scale all those public amenities that are usually provided by the urban lifestyle.
Perhaps the most popular request at the moment is technology and privacy of real estate. Due to the fact that in the modern world, connected by Internet networks that destroy many traditional ideas about privacy, many buyers seek to find privacy from society at least within the framework of their property.
There is a special demand for housing with high technological security, developed security systems, fenced territory, secrecy in front of the public.
And, perhaps, the last in the list, but not the most important is the desire to get a turnkey property. Elite real estate should be created or selected strictly according to the requirements of the buyer and provided in a state where a resident can simply get a key and enter the housing without thinking about how to additionally equip it.
What defines luxury real estate
Luxury real estate is defined by several characteristics combined together:
- Furniture and other interior details
- Neighboring houses
- Economic and social benefits located nearby
- The structure of the building and the materials from which it is built
- Security and privacy, and so on.
Many well-known and elite areas have a sufficient supply of fairly ordinary real estate, but this property is still elite simply because a fairly large number of wealthy buyers and investors compete with each other for the right to own real estate in this area, thereby inflating the cost of objects to incredible heights.
All this determines that the price is the leading indicator after the location. This can be either the price as a whole for objects, or for square meters.
Given all of the above, such an indicator as the size of real estate often fades into the background. The quality ranks the first place, as well as the internal content of the house and the availability of goods.
The size of real estate has a major influence on the indicators of elite real estate. We are not talking about the net size of the object, but as we said at the beginning of the article, we are talking about how effectively and functionally these sizes are used.
A compact, but competently inscribed residential object on the adjacent territory, the entire area of which is carefully measured and used with the greatest efficiency, can cost much more than a typical and inexpressive mansion on the market. Even if the latter will be more expensive, due to any elements of luxury, it still will not make expensive housing elite.
Thus, although compact apartments with an area of 30-50 sq. m. cannot be called elite housing, at the same time large villas with an area of hundreds of sq.m. are useless if they are considered as premium-class housing, only at the expense of their cost and no more.
How to distinguish elite from other real estate
The last point of this article will be some objective data, according to which you will be able to understand whether this is an elite housing or not. This data consists of what we discussed earlier.
Luxury real estate is always at least 15-20% more expensive than the average in the sector. With the rental rate, the picture is even more obvious, since the average cost for Dubai is determined centrally using the Rental Rates Index, and usually the cost of renting premium-class housing is 40% or more expensive than the average for the Emirate.
Such real estate is steadily becoming more expensive by 7-15% per year.
Return on investment
The premium sector, as you can understand, brings in each individual case more income, for example, from rent, than ordinary housing. The luxury real estate market is characterized by higher profitability with higher volatility of prices and rental rates. This sector is focused on a narrow and specific stratum of the population.
Usually, elite housing is located either in areas dominated by high-rise real estate, residential skyscrapers with a wide offer of large-sized apartments and penthouses, or in fenced cottage settlements and residential clusters, where villas and townhouses are sold.
As a rule, districts are usually advertised as self-sufficient within the Emirate — "a city within a city". Often they offer one or two unique properties that become the center of marketing in the market.
- DAMAC Hills, for example, is distinguished by a huge golf center, around which the area is built.
- Motor City advertises itself as a center of life for those who are interested in various kinds of auto and motor sports.
- Palm Jumeirah is known as the first fully artificial island in the Emirate, as they say — "state-of-art".
- Arabian Ranches can make themselves unique by pointing out that the most advanced and environmentally friendly 3D printing technologies are used in the construction of houses.
In other words, they always try to present the location of the property to buyers as something that they will not find anywhere else.
The area of real estate usually starts from 120-140 sq. m. However, this is an extremely variable indicator. A small apartment, but located in a building designed in collaboration with some famous designer, will cost much more than many large villas with many amenities.
The price is high, because owning such a property allows you to touch the feeling of elitism, uniqueness from owning something that most other rich buyers do not have.
But this indicator is already more stable, to some extent because it acts as a business card of the industry. The height of premium-class objects, from floor to ceiling, always starts from 3.6 meters.
Private and social benefits
Luxury real estate always tries to attract buyers with special amenities. These can be private rooftop pools, underground parking lots, private gyms, cinemas, quick access to local elite schools and medical centers, or a location within walking distance of major shopping centers and attractions. This and much more always accompanies any real estate offer in this sector.
Luxury apartments strongly emphasize the high security of life. Houses of this category are often equipped with various emergency buttons for calling rescue services, intercoms, special fire ramps and other modern security systems.
Housing is positioned as being able to provide for itself, so often the objects have solar generators, various automated functions of the "smart home", special zones for first aid, bunkers for rescue from natural disasters and terrorist attacks.
As you can see, luxury real estate is more than just price or size. This is a dynamically changing of market demand.
To become the owner of a truly elite, unique real estate, it is necessary to look at the market in the totality of all its factors, public interests, features of objects and areas of their location.
If you are interested in what the luxury real estate sector of Dubai looks like today, where in 2021 you will be able to buy not just housing, but an object of architectural art for a luxurious life, we are ready to help you to provide advice, market analysis, selection and evaluation of housing in the most expensive areas of the emirate.