A businessman tells me he has just returned from a gruelling day. He’s spent the past eight hours queuing to buy an apartment in downtown Dubai. However, he isn’t concerned about the wait. “I know I can sell it immediately at a 25 per cent premium.”
So far as homeowners are concerned, the city of Dubai has existed for just over a decade. It was invented in May 2002, when His Highness Sheikh Mohammed bin Rashid al-Maktoum issued a decree allowing foreign buyers to purchase property on a freehold basis. This set off an extraordinary boom, a boom that ended with an equally extraordinary bust in 2008/2009. Memory of the recent crash, however, has clearly now been erased. This year prices have risen with allegro speed once again.
For many, Dubai remains a gold-rush town, a modern, miracle metropolis of high-rise towers and four-lane highways that have sprung up from desert scrub in just 40 years. Today, it is home to more than 2m inhabitants, a cosmopolitan cocktail of expats appreciating its year-round sunshine, Lamborghini-driving police and luxury lifestyle.
In this adolescent property market, it’s not unreasonable to question why buyers have plunged back in with such optimism after an interval many would consider amnesiac brief. The answer is that a lot has changed recently. “There’s a much stronger commercial platform than there used to be,” explains James Price, head of International Residential Development at estate agent Knight Frank. “There are more long-term jobs and the financial sector is much more developed. Essentially, there’s just more buzz about the place.”
Last year, US global consulting firm Mercer confirmed Dubai as the best place to live in the Middle East, with its infrastructure now rivalling those of Melbourne and Madrid. This judgement reflects the city’s rapidly improving transit system, multitude of new schools and world-class sporting and leisure facilities (including golf, polo, horse racing and Formula One). It’s hardly surprising, then, that investors from Arab Spring countries and Europe’s fragile property markets continue to be drawn to the city’s safe, virtually tax-free shores.
In many ways, too, Dubai has become a latter-day Venice, an increasingly powerful pivot of international travel and trade, where the government-owned airline Emirates has already captured much of the traffic from south Asia to North America. Now, if you’re travelling long distance from west to east or south to north, you’re likely to set foot, however briefly, in the dazzling, marble-clad terminal of Dubai International Airport, a temple to modern transport predicted to overtake Heathrow’s passenger numbers in the next few years. These prosperous travellers are also part of a strategy to fuel the frenetic expansion of local tourism – plans that will certainly be further enhanced if Dubai wins its bid to host the World Expo in 2020.
The property offering has matured to match the city’s rapid evolution. In the boom years, the market was overrun with “flippers”: get-rich-quick speculators who bought, generally off-plan, to sell again straightaway at a profit. Nowadays, an increasing supply of deluxe accommodation is targeted at those who have the long term very firmly in mind.
“A number of newer developers have used leading architects such as Foster + Partners and Zaha Hadid to create iconic buildings with the quality of fittings and level of service you’d find in New York and London,” confirms Price. “The prime units aren’t worth flipping. They’re for end users. It’s a very different base to eight or nine years ago.”
This new breed of buyer (including second-home owners from neighbouring states) favours well-established locations such as Downtown Dubai, Emirate Hills, Dubai Marina, Jumeirah Beach Residence, Jumeirah Park and Arabian Ranches. But even so, the market remains divided between those looking for fast-paced high-rise living and families who prefer the calmer, more expansive pleasures provided by a more spacious canvas.
There’s certainly no shortage of the former in a city that branded itself with the world’s tallest man-made structure, the Burj Khalifa, a James Bond vision of ear-popping lifts, sleek interiors and carnival fountains. Here, if higher than thou is your priority, some astonishing apartments are available. Hamptons recently sold a two-bedroom flat in the building’s Armani Residences for £1,337,230.
The other celebrated ornament of Dubai marketing is the Palm Islands, a miraculous archipelago created in the form of three date-palm trees. With its five-star hotels, shimmering beaches and high-end shopping, the island of Palm Jumeirah, the smallest of the three, is a prime location at its most prime. Here a serviced four-bedroom penthouse in the Kempinski Residences, with sea views and a large terrace (on the market through Cluttons for about £2,316,140), offers hotel glamour, as well as potential for letting.
Younger buyers tend to cluster in the fashionable Marina area, where Hamptons is selling a marble-clad, four-bedroom apartment in ultra-exclusive Le Rêve for £12,517,210, accompanied by valet parking, a rooftop pool and a gym. There are also options for those on a more restricted budget; a “Manhattan-style” four-bedroom penthouse in West Avenue recently retailed for about £1,299,610.
Like Renaissance Venice, contemporary Dubai has more than its fair share of palazzi, grandly scaled villas in a variety of soothing locations that circle the hectic inner core. Here, the most sought-after properties are found in Emirate Hills, Al Barari, The Lakes and the Ranches. Driving their popularity is the fact that they are vibrant areas offering excellent access to amenities such as parks, schools, transport, shopping and leisure. In the early days, much of the streetscape was free of greenery and was austerely Middle Eastern in style. However, as the market has developed, so has the approach, with pleasant, family-focused areas such as the Ranches (where a five-bedroom Golf Home villa is for sale for about £2,564,440 through Knight Frank), for example, seeming more like Spain or Portugal.
The design approach, too, both in terms of the interior and exterior, has been upped a significant notch. While many people are still buying to “flip”, those who purchase properties for themselves expect the standard of finish to reflect the price paid. This is certainly a consideration at Prime Projects International, which has recently completed a number of villas left unfinished in the downturn. As well as flawless utility systems (electrical faults and leaking pipes are no longer tolerated foibles), the company’s newly completed houses (from £2m through Knight Frank) boast kitchens and bathrooms as magazine-smart as their golf-course surroundings.
One developer that has helped set a new benchmark in residential indulgence is the Zaal family, responsible for the exclusive Al Barari estate, which includes the recently launched Reserve villas (from about £3,540,980). Zaal Mohammed Zaal, the founder of the company, is passionate about delivering the type of home he himself would like to – and, indeed, does – live in. “My father has a great love of gardens and nature,” says Zaal’s son Mohammed, CEO of Al Barari. “Dubai is, of course, a desert, and when we began planning our own house we couldn’t find anything suitable, so we developed an area.”
Today, their estate is a peaceful domain of stately villas interspersed with tree-lined walkways, limpid pools and a network of gardens planted in a full Chelsea spectrum, from Renaissance and contemporary to woodland and Balinese. (Zaal Senior is a passionate plantsman who founded Dubai’s largest privately held nursery, importing species from all over the world.)
One of the highest priorities for many villa buyers in Dubai is plot size, and the Al Barari Reserve villas enjoy some of the most generous in the city (varying from 14,000sq ft to 100,000sq ft overall). A further advantage here is that many of these freehold properties are offered as shell and core (with space for at least six bedrooms), allowing purchasers to tailor the landscape and interior to their own specifications using the services of the Zaal family builders and the much-lauded interior-design expertise of Leeds-raised Lesley Zaal.
The Zaal family has managed to create an environment that combines tranquil privacy with the highest standards in communal facilities – tennis courts, a health club and fashionable restaurant The Farm will soon be joined by a “six-star” hotel. But those who prefer their seclusion absolute will almost certainly be looking at Emirate Hills. Considered the Beverly Hills of Dubai, this was one of the city’s earliest developments and remains one of the most exclusive. From the outset, each owner was allowed to create his own home in his own style. Now, many of these are coming onto the market for the first time. Hamptons, for example, is selling a villa in Sector P with four suites, a hair salon, entertainment area, party zone and staff quarters, for £6,981,490. Properties like these offer the opportunity for something entirely revolutionary in this adolescent city: refurbishment on a grand scale.
“In the early days, people were selling pieces of paper and a plan,” says Helen Tatham, director of residential property at Knight Frank, who has lived in Dubai since 2003 and witnessed the whole process. “Now buyers can see a real house and how they can make it their own.”
Dubai has come a long way: from speculation to spectacular in 11 roller-coaster years.