Dubai: A millionaire hub
According to New World Wealth, Dubai is ranked 5th for second-home hotspots for HNWIs after New York, London, Hong Kong and Singapore.
Dubai - Emirate hosts a broad range of attractions to draw ultra-rich
Dubai remains a hotspot for the wealthy, attracting high net worth individuals (HNWIs) from different countries who make the emirate their second home.
According to New World Wealth, Dubai is ranked 5th for second-home hotspots for HNWIs after New York, London, Hong Kong and Singapore. The UAE remains one of the biggest recipients of HNWIs, with over 38,000 millionaires moving into the country over the past 20 years.
Andrew Amoils, head of research, New World Wealth, estimated that currently around 55,000 millionaires live in Dubai. In addition, around 33,000 HNWIs based in other countries have second homes in the city. The emirate is ranked 35th worldwide in terms of number of millionaires.
In 2017 alone, over 5,000 millionaires moved to the UAE with many of them coming from India, Turkey, Saudi Arabia, Egypt, Nigeria, Iran and Lebanon. Analysts say the key reasons that attract millionaires to Dubai are the good lifestyle, safety and security and top-quality housing facilities at much more affordable rates than most other major cities.
"The reasons why wealthy second home owners may like the city is the top-end apartments and villas, first class healthcare system and yachting and beaches," Amoils said.
As per New World Wealth's latest figure for Dubai, average price for an apartment is $7,800 per square metre as at June 2018.
Total wealth held by all the individuals living in the UAE amounts to $925 billion as of December 2017 with nearly half - $470 billion - of it is held by the HNWIs. Total wealth held by people living in the UAE increased significantly over the past 10 years, from $580 billion in 2007 to $925 billion in 2017. The number of millionaires also rose from around 52,000 HNWIs in 2007 to around 88,700 HNWIs in 2017.
Taimur Khan, research manager, Knight Frank, said Dubai hosts a broad range of attractions which draw in millionaires from around the world.
"Its business credentials as a global financial hub, central location allowing access to two-thirds of the world's population within eight hours, over 200 private schools and world-class lifestyle and amenities on offering are drawing in UHNWIs from all over the world," Khan said.
He noted that Dubai's prime property on a global level offers a very competitive product in terms of quality but more so in terms of value.
"For prime property in Dubai, $1 million will buy 137sqm compared to 19sqm in Monaco, 22sqm in Hong Kong, 29sqm in London and 30sqm in New York. This combined with the low levels of transaction fees means it is not a surprise we have seen over 140 nationalities invest in Dubai's market over the first nine months of 2019."
Craig Plumb, head of research for Mena at JLL, believes Dubai offers a number of attractions as a second home destination for the mega rich. Among these are its strategic location - enhanced by strong global connectivity, a dollar-pegged currency, relatively stable political and security situation, and an established legal framework which provides some degree of protection to investors. The high level of liveability and quality of life also contribute to the cities attractiveness.
"Perhaps the greatest advantage that Dubai offers over other markets in the region is the well-established freehold framework, with foreign investors being able to purchase real estate on a freehold basis across an ever extending proportion of the city. Along with relatively relaxed currency controls, Dubai has attracted many wealthy foreigners to purchase real estate as a second home or an investment over the past 30 years," Plumb told Khaleej Times in an interview.