Dubai: The UAE has always been the shopping capital for the Middle East – but these days, ‘shoppers’ are as likely to pick up a private jet or a luxury yacht in the UAE. To go along with the Dh100 million to Dh600 million homes that are being snapped up with regularity.
The UAE’s resident base of the super-rich has seen a significant increase since 2021 – “Along with their Rolls-Royces, Bentleys and Ferraris to fill their garages, these individuals need their boats and jets,” said an estate agent specializing in luxury properties. “This is seen in the number of enquiries still coming in for homes by the water, or where possible near marinas with ample space to park their yachts.
“These days, a Dh100 million home sale is seen as a regular deal – the ‘new normal’ is having developers coming up with Dh200 million plus homes and easily finding a buyer to take possession when the homes are ready in 2-3 years.”
It is then natural that their buying would extend to other categories – jets and yachts, being just two – and that’s exactly what businesses are trying to provide.
Buying the next yacht
The trend of a growing resident base of the super-rich is visible at the Dubai International Motor Show, which opened Wednesday (March 1) at Dubai Harbour. The berths are filled with the latest in luxury yachts, and with price tags in the millions of dollars. Some – or many – of these boats already come with a ‘Sold’ tag attached to them.
There are many first-time brands showing off their boats at DIBS, and sources in the industry say that the Dubai event has become as important as any show held at Cannes or other high-profile marinas in Europe or the US.
“These days, a lot of the demand for luxury yachts is as likely to come from within the Gulf as from Europe or the US,” said Mohammed Hussein AlShaali, Chairman of Gulf Craft. “What we are displaying at DIBS 2023 are brand new yachts – there’s nothing that’s pre-owned.”
Private jets too
First-time buyers are also driving record sales of private jets in the region, especially those from the UAE, Saudi Arabia and Qatar. “Demand has radically superseded supply,” said Mark Abbott, CEO of Vertis Aviation Aircraft Trading in Dubai. “Due to the massive inventory shortage over the past two years, aircraft brokers have performed exceedingly well.
We were seeing a new breed of buyers and decided to integrate brokerage with our existing charter operations.
– Mark Abbott of Vertis Aviation Aircraft Trading
That meant setting up shop in Dubai.
A wealth boom, a more robust demand for leisure experiences, and the loosening of pandemic restrictions have driven the business aviation industry in recent months. Abbott said many of those interested in private jets are migrating from chartering one to actual ownership.
How much do these jets cost?
Depending on size, range, model, and features, a private jet can go from $2 million to over $100 million. “Prices can range from $3 million to $4 million for a pre-owned Learjet 45 or a Cessna Citation CJ3+ plus,” said Abbott. “It can cost between $10 million to $20 million for a mid-range Challenger 300 or 350 – and ultra-long range jets $25 million to $75 million.”
Last year, private plane use soared to its highest level on record. Aviation data research firm Wingx recorded 3.3 million business jet take-offs in 2021, the most for a single year and seven per cent more than the previous high in 2019.
More buyers waiting in the wings
Research finds that there are at least 300 billionaires in the region. Saudi Arabia has the most number of millionaires in the Middle East, with more than 224,000. “There are just under 800 business jets in the region now,” said Abbott, and this represents a good base to grow from.
Especially if you factor in the new residents setting up homes in the UAE and elsewhere.
“The fact that Dubai’s luxury residential market remains significantly undersupplied – just 8 new villas are expected in the city’s prime neighbourhoods until 2025 – and is more affordable than its global counterparts is also adding to the overall appeal of owning a home in Dubai amongst the world’s elite,” said Faisal Durrani, Partner – Head of Middle East Research at the real estate consultancy Knight Frank.
“Indeed, $1 million in Dubai’s prime residential precincts translates into approximately 1,130 square feet of space, roughly five times more than (a similar home in) Hong Kong and three times more than London or Singapore.
“These factors have fuelled business and economic confidence and have in turn helped to super-charge demand for luxury homes.”