The Scoop
A Dubai property developer won a record price for the sale of a renovated villa on the Palm Jumeirah, arguing that the transaction offered evidence that fears of a real estate bubble in the city were unfounded.
David von Rosen’s firm 25 Degrees sold the villa for 160.5 million dirhams — $43.7 million — to a “European entrepreneurial family,” von Rosen said in an interview. The property has six bedrooms, a private cinema, and a pool stretched over 10,700 square feet. The price represented a record for secondary villa sales in Dubai, according to Sotheby’s, which managed the transaction.
Know More
Concerns have been growing over Dubai’s property market overheating: One investor warned in AGBI last week that there was “clear evidence of speculative excess,” the real estate firm Jones Lang LaSalle reckons that prices have risen 70% since just before the pandemic, and Fitch forecasts that Dubai residential property will cool off through this year and into 2026.
But von Rosen insisted the high-end of the real estate market in the city was insulated from those worries, and dismissed broader concerns of a bubble similar to those which hammered it in 2008 and 2014. Even though middle class buyers are finding the Emirati city less affordable, there’s enough demand from new entrants attracted by lower taxes and relative deals.
Unlike prior downturns, he argued, Dubai has seen significant numbers of people move to the city in recent years with those migrants staying for longer periods, with taxes in particular an even bigger factor for the ultra-wealthy.
If anything, he said, there was more room to grow relative to other major cities: The real estate firm Knight Frank said in March that while $1 million buys an average of about 840 square feet in Dubai, it only buys about 365 square feet in New York and London.
Notable
- “Yes, we are at a peak,” AGBI’s editor-in-chief wrote this month, even as he listed a handful of factors that suggest any price correction won’t be as punishing as 2008.