Binghatti Properties is planning around 12,000 homes across the city over the next two years, Muhammad Binghatti, the chairman of the privately owned developer said in an interview. That’s over and above the 9,000 homes it’s already building, and the $1 billion it’s set to spend on construction in the next 18 months.
“Many of our investors want to put some of their wealth outside their countries to protect themselves against currency fluctuations,” Binghatti said. “They’ve stood by and watched the capital gains in Dubai over the past few years, which they missed out on.”
The firm has seen a 20% increase in the number of Turkish and Egyptian buyers from last year, making them among the top international buyers of Binghatti properties, he said.
The Turkish lira has surrendered 95% of its value since 2012 driven by unorthodox monetary policies. The Egyptian pound has plunged 68% since early 2022 as policymakers resorted to four devaluations to combat an economic crisis.
Dubai’s real estate market has traditionally been dominated by Indian, British and European buyers. Russians shot up the rankings in the aftermath of Kremlin’s invasion of Ukraine, but that trend is fading.
The broadening base of international buyers is another indication that the emirate’s real estate market might be breaking free from its boom-and-bust cycles.
Home prices in the city rose 24% in the year through June and rents climbed 19%, according to Cushman & Wakefield Core. Since 2020, values are now up more than 60%.
There are some signs of moderation though. “Prices are still increasing but not as sharply as last year,” said Prathyusha Gurrapu, the head of research and advisory at the real estate consultancy firm.
“There is a considerable amount of supply coming in the next two to three years, which will help moderate prices and rents.”
Housing affordability has become a major concern in a city where many residents are facing a choice between moving into the periphery or forking out a bigger chunk of their paychecks to landlords.
The average annual rent for a villa, or family home, reached 353,000 dirhams ($96,100) in the year through May, according to real estate adviser CBRE Group Inc. Average apartment rents, meanwhile, soared 22.2% to 127,000 dirhams during the same period.
While transactions for ready properties have plateaued, sales of homes ahead of construction are still going strong. Deals in the so-called off-plan market surged 61% from a year earlier, according to the real estate consultancy firm.
To capitalize on that demand, Binghatti has been on a buying spree, purchasing land in Palm Jumeirah, the iconic tree-shaped artificial island off the coast of Dubai, along with several plots in Business Bay.
It’s also making a play for the top end of Dubai’s market, where more than 300 homes worth $5.4 million or more changed hands in the second quarter.
Apart from a partnership with jeweller Jacob & Co. on a 500-meter (1,640-feet) tower which it says will break the record for residential buildings held by New York’s Central Park Tower, Binghatti has announced a Mercedes-branded tower, where apartments will cost up to $10 million and a tie-up with Bugatti on a project that will include elevators to transport cars to penthouses.
“We’re still selling well and at good rates,” Binghatti said. Two months ago, his company kicked off sales of 1,850 apartments at a peripheral neighborhood known as Dubai Science Park. Already 80% of the homes have been sold at around 1,900 dirhams a square-foot ($517 per square foot), he said.
That’s because the city remains a ”reasonable deal for investors,” Binghatti said. “The average square foot in Dubai is a third of the price in London and about half of the average price in Los Angeles.”
