Dubai classifies 12th globally in Julius Baer’s Global Wealth and Lifestyle Report as the comparative ‘cost of living’ stays competitive compared to primary global cities.
Dubai, which has long been one of the most attractive economic hubs and a symbol of opulence in the Middle East, is the 6th most expensive city in Europe, the Middle East and Africa, according to the report.
“Although the impact of the global pandemic has now settled into a ‘new normal’, inflation, rising living costs, and increased geopolitical tensions have not had as much of an impact on Dubai as on other markets, which have contributed even more to its appeal for wealthy residents,” the report says.
Investment outlook and regional advantages
The report indicates that the ultra-rich in the Middle East are bullish in their investment perspective and direct the charge with 72% investing better YOY.
A key advantage is that the UAE, situated at the East and West crossroads, boasts some of the busiest airports and prominent ports. The outstanding geographical benefit of Dubai draws businesses from all over, making it an excellent market for global development. The report reflects that spending on business (65%) and leisure (67%) travel has increased significantly in the Middle East over the past 12 months. Investors looking for profitable markets spanning multiple continents have also been drawn to it because of its advantageous position.
Thriving real estate sector
The report highlights that the real estate sector accounts for 8.9% of the economy and shows impressive dynamism. According to the index and survey data, real estate is a critical asset in the Middle East, with prices in Dubai up 16% in US dollar terms. Property in Dubai is, put, ‘hot property.’
“With the world’s most active $10 million housing market in 2023, according to Knight Frank, global and local demand is sky high. The region’s wealthy are spending the highest on luxury residential properties compared to any other region, amid strong economic growth and world-class infrastructure,” said the report.
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Competitive advantage in the property market
“Even though the residential market has maintained an upward price revolution, residential property is moderately affordable compared to multiple regional cities. Cosmopolitan and savvy investors are moving to Dubai to buy opulence and branded real estate, given the city’s competitive advantage compared to global and regional peers. This increasing craze will uphold Dubai on the international investor’s radar. In our survey, more than half of wealthy Middle Easterners said they had spent more on residential property in the past 12 months, and planned spending is equally high, with 58% saying they will pay more in the coming 12 months. No other area comes even close to this, the Global Wealth and Lifestyle Report stated.
Regional trends in spending and lifestyle
Price rises for all goods and services in the Julius Baer Lifestyle Index slowed to 4.0% in the US dollar over the past 12 months. EMEA has become the most expensive region in which to live for the first time.
In the past year, all areas saw increased spending by HNWIs (high-net-worth individuals) on trips and hospitality, with the Middle East and APAC delivering the highest growth. The Middle East has witnessed a significant increase in business (65%) and leisure travel (67%).
In the Middle East, spending was concentrated on luxury goods such as clothing and watches, but most significant was the demand for luxury residential properties. Middle East’s HNWIs focus on premium products – such as designer clothing, jewelry, and luxury watches – and real estate, while Europe and APAC focus on hospitality (five-star hotels, top restaurants), and spending in the Americas is bestrewn across all categories.
