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The luxury real estate market in Dubai sees an unprecedented increase in sales as the global fleeing pandemic, find new homes!

Christophe Reech had been filled with the city's pandemic lock-downs after almost three decades in London. This spring he sold his luxury city house and threw himself into the Dubai desert cheikhdom to begin a new life with his family. شراء

He said there was no turning back. The super-rich foreign friends of the French business magnate did the same, driving an unprecedented boom in sales of the most exclusive properties in Dubai.

"There is only one strategy in Dubai: business as usual," said Reech, President of an eponymous group of real estate and financial technology firms. The philosophy is simple: "Take care to vaccinate everybody and to keep it all open."

"That attracts people like me, of course," he said.

With vaccines developing worldwide unevenly, and waves of infections force countries to extend restrictions, Dubai's high-end real estate market, one of the few places on the world that foreign buyers can dine, shop and do business in person, is flooded by a flush of cash. They are grabbing record numbers of luxury villas and penthouses, sending rocket prices on this booming and busy market.

In the first quarter of 2021, sales of Dubai's high-quality properties, once slow, were up 230% compared to the same period last year. Prices rose by up to 40 percent in some top-end areas, according to Property Finder, the largest website in the country.

A record 90 properties worth 10 million dirhams (2,7 million US dollars) changed hands last month, 84 in March over 8 years ago, according to Property Monitor. In comparison, 54 such transactions occurred throughout 2020.

"Tons of people arrive and buy multimillion dollar properties on the spot without due care," said Knight Frank consultancy partner, Matthew Cooke who manages penthouse sales in the artificial Palm Jumeirah archipelago in Dubai.

As with previous cycles, cash purchasers started to snatch homes and turn them into profits. Analysts say it continues until prices rise too high and returns decrease.

How much time the craze lasts and what awaits the city of the skyscraper remains unclear. Home prices still fall in the mid-range of the urban saturated property market, which has fallen sharply since peaks reached overbuilding seven years ago. Average residence sale prices this month collapsed to US$400 per square foot from US$1,300 in 2013 at Burj Khalifa, the tallest building in the world.

"The market has been going through a time of boom...but people are well aware that Dubai can run too fast and that everything falls apart," said Jackie Johns, partner of Premier Estates, Christie's International Real Estate affiliate, referring to the debt-driven crisis that kneaded the city in 2008.

The hot spot on the luxury market is not unique to Dubai, because ultra-low interest rates and families' desire for more space saw the rich decamp into suburban mansions in cities like New York and Paris. But the sparkling Emirates, home of Emirates' long-haul carrier and the highest tower on earth, has other factors.

Since the tourists were first reopened last summer, Dubai has become the pandemic-friendly holiday destination worldwide. Foreign guests now gather on the busy bars and beaches of Dubai without mandatory days of quarantine, their selfies at hotel resorts and helicopter pads are stirring resentment back home.

In January the tourist influx helped drive the dramatic surge of the country in coronavirus cases and led the UK to suspend flights. However, with its young population and low mortality rates, the United Arab Emirates fared relatively well during the pandemic. Over 9 million people have administered 10.6 million doses of vaccine, and have relied heavily on the Chinese state-sponsored Sinopharm vaccine for their inoculation campaign.

Dubai has long enjoyed capital flight as a global financial center known as an oasis in the volatile Middle East. Homeowners on the Palm Jumeirah, which accounted for 43 per cent of all April transactions, are Afghan warlords and the political elite, all searching for a secure place to park savings from countries such as Nigenia, Syria and Lebanon.

Now, a large proportion of rich buyers are coming from Europe, India, China and Russia to this human-made archipelago, known as the Palm and in other exclusive villa communities in Dubai, looking for a better quality of life in the face of a pandemic. The Palm recorded its second highest residential sales in March, when a Swiss family bought a US$30.2 million mansion on the river. The third-most expensive home in the town for US$28.6 million was bought last month by an unidentified European family.

This demand is underpinned by plentiful vaccines. While questions about the effectiveness of the Sinopharm shot in Dubai include Pfizer-BioNtech and Oxford-Astrazeneca. All you need to do is have a residential visa – which the city already extends to high-end property purchasers and investors.

Reech, which plans to buy land in Dubai for his dream home, immediately after he received his residence, booked an appointment for Pfizer. He said he would have to wait four more months in the UK.

New initiatives to attract wealthy foreigners include remote work visas, pension visas and long-term "golden" renewable visas. In an unprecedented move, authorities even offer a select group of foreigners the Emirates citizenship. The UAE has also amended its strict Islamic legal code to boost its brand as a cosmopolitan city, allowing unmarried couples and non-citizens to comply with foreign laws concerning divorce and inheritance.

Dubai's post-pandemic high-life perspective has become more prominent as international investors "play a favourable role in economic recovery," says Robert Mogielnicki, a resident scholar at the Institute of the Arab Gulf States, in Washington.

And even if the market's meteoric rise collapses, analysts say that the rich will not bear the brunt of the repercussions. If anything, the pandemic has shown that the high volumes of the world thrive in a crisis.

"The losers are at the bottom end," said Mogielnicki.

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