Growing gains: Is Dubai’s burgeoning real estate sector mirroring Mumbai’s footprints? – By Mr. Anmoll D Shroff, Founder & CEO, Graanth Realty

With sales worth AED 141.9 billion in Q3 2024 and a 43.9 per cent YoY increase in the sales value of apartments over Q3 2023 (as per a recent report by DXB Interact), Dubai’s real estate market underscores resilience and growth, further solidifying Dubai as a prime, secure investment destination. These impressive figures only highlight the market’s resilience and consistent growth, boding well for Dubai’s appeal as a secure and prime investment option for discerning property buyers. For those familiar with the Indian and UAE property markets, Dubai’s growth story is hearteningly reminiscent of Mumbai’s real estate trends. The two markets have much in common – an increased appetite for luxury properties, an expanding nucleus that can be attributed to sustained infrastructure investments, and their global reputation as cosmopolitan, vibrant and thriving financial hubs.

Meccas for the upwardly mobile

As is the case in Mumbai, Dubai’s surge in demand for luxury properties is being driven by the region’s consistent economic growth. In recent years, Dubai has successfully diversified its economy, with non-oil sectors accounting for 70 per cent of Dubai’s GDP. The UAE has also been consistently attracting foreign investments in diverse sectors, further consolidating its status as a leading economic hub in the Middle East. Dubai’s central location ensures proximity to other major global cities, while its reputation for world-class luxury promises a lifestyle upgrade for residents. All these reasons have encouraged investments from high net-worth individuals in both commercial and residential properties in Dubai. Further, Dubai’s favourable tax policies and geopolitical stability act as additional incentives for global investors. The difference between the two cities lies predominantly in the nature of the demand for real estate – while Dubai attracts ample global investments, Mumbai’s demand is predominantly domestic, fuelled by its status as a thriving financial hub. Further, even though both cities are grappling with acute land scarcity, which is driving up prices for prime real estate, Dubai’s investor-friendly policies and infrastructure development give it a stronger international appeal, while Mumbai’s growth remains constrained by land availability and various regulatory challenges.

An eye for the exceptional

Real estate buyers in both Dubai and Mumbai are increasingly prioritising factors such as location and connectivity. Both cities are witnessing an increased appetite for properties that are situated conveniently from major business hubs and transportation networks. The type of properties being sought also have certain commonalities – security and privacy remain top concerns for buyers in both cities, with gated communities and exclusive spaces topping the list. Progressive professionals and entrepreneurs in both cities are increasingly seeking homes equipped with smart technologies that enhance convenience and efficiency. Additionally, buyers are demonstrating a keenness for luxury amenities such as gyms and wellness centres. Additionally, there is a growing interest in sustainable living in both cities, with demand for eco-friendly, energy-efficient developments reflecting buyers’ desire for a holistic lifestyle experience. Buyers in both cities also consider resale potential and rental yields, especially in prime locations.

Interconnected and expansive

Even as Mumbai is witnessing a flurry of infrastructure developments that are reducing distances between key commercial and financial hubs and driving up demand in certain strategically located suburbs, Dubai too is in the midst of its own expansion trajectory. The Al Maktoum International Airport, which is slated to be the world’s largest capacity airport upon its completion, as well as District 2020 — a smart, human-centric, mixed-use community that will extend Expo 2020’s vision of global innovation and collaboration – are projected to attract businesses and tourism, further driving real estate interest in Dubai. Meanwhile, Mumbai’s metro expansion, coastal road projects and the upcoming Navi Mumbai International Airport are enhancing connectivity and increasing demand in areas such as Thane, Mulund and Borivali. Developers in both cities are tapping this demand by focusing on strategically located developments that offer luxury amenities, smart tech and sustainable features, to cater to the demands of both investors and end-users.

Like Mumbai, Dubai is rapidly emerging as a hotspot for property investors, promising high returns. In the short term, this surge is expected to drive up property prices, leading to a tight supply and rising rental costs, especially in high-demand areas. This surge will encourage the development of additional luxury and commercial projects, further revitalising the real estate market in both cities. In the long term, sustained investor interest is likely to stabilise the market by increasing supply and balancing demand. Property values may appreciate steadily, offering long-term growth.