Dubai’s Real Estate Market is Booming: Time to Buy
Dubai remains one of the priority destinations among foreigners who want to purchase real estate as an investment or move to permanent residence. Ready-made housing is as sought-after, for example, in the modern residential complex Riviera Mbr in Dubai, as off-plan properties. The sales results of this and last year confirm that now is the right time to invest.
Past and current developments in the Dubai real estate market
According to https://emirates.estate/, the reasons for strengthening the Dubai market were:
- Decent quality of life with attractive climatic conditions.
- A rapidly developing economy.
- Convenient infrastructure.
- Successful visa reforms.
- Overcoming the pandemic consequences.
During the coronavirus, the UAE remained a country where the lockdown was short. Vaccination opened the borders and prevented the spread of the disease. However, during the closure of the borders, real estate continued to be sold. Buyers are not afraid of online transactions, although most of them prefer to come to the country and get acquainted with real estate visually.
In 2021, the total value of the property sold was over $41 billion. The last time these figures were observed in 2009 and exceeded the results of 2020 by 110%. Sales grew by 74%. About 60% of deals related to ready-made housing, and the remaining 40% were off-plan properties. This shows the growing interest of investors in the developers’ offers, which will be implemented soon.
Sales results for the first half of 2022
Experts believe that this situation will continue, as the sales results of 2022 demonstrate increased demand and steady price growth. In January 2022 alone, the average cost per square meter reached $428, which is 34% higher than last year. Prices for premium properties have grown most significantly. This sector has a figure of 37%. Low-cost properties have risen in price by 15.7%.
From January to June, over 37,760 transactions were concluded. This is 60% more than in the same period last year. There is an opinion that prices are stabilizing due to the launch of new projects. The latter belong to off-plan housing and do not meet the needs of those who move to the country. Therefore, the shortage of offers on the secondary market may contribute to an increase in the cost of housing.
Real estate market by type
For several housing types, including townhouses and villas, offers do not keep up with demand. There has been an increased interest since the beginning of the pandemic. Potential buyers realized how important spacious areas are to live comfortably and work quietly. Even a cozy townhouse allows you to:
- limit social contacts with neighbors;
- expand living space;
- use a small plot of land for recreation.
In the spacious villas, you have more options, such as a swimming pool or a private beach.
Developers pay attention to the taste preferences of investors, so in 2021-2022, they began to build about 10,000 housing units of this type. However, it is not planned to put them into operation before 2024-2025.
Apartments are also in great demand. Buyers who prefer urban infrastructure choose them. It is also a popular investment format that brings profit from renting.
Is it profitable to invest in Dubai real estate?
Local housing is popular with locals and foreigners. The top 5 include the British, Indians, French, Italians, and Russians. However, real estate is bought during price increases, and investments in it remain profitable. With the opening of the borders, vacant spaces for rent are becoming more popular. The reasons for investing in Dubai housing are:
- Prices are still affordable. If you compare them with the cost of housing in large megacities in Europe and the USA, you will see that Dubai real estate is affordable.
- No taxes. Homeowners have no material obligations to the state. You can own a house, rent it out legally and not bear the tax burden.
- Capitalization of value and high liquidity. You can always sell an apartment for more. If you buy an off-plan flat, after putting the house into operation, you can get tens of percent of the profit from a resale.
Prospects of the Dubai real estate market
Bloomberg experts say that in 2022 and 2023, you should not count on falling prices. Prices may increase by another 3% this year, and by 2.5% in 2023. In 2021, experts predicted 3.5-4% for 2022. Price growth reached these figures in the first half of 2022. And this is speaking about averages. Premium real estate in prestigious regions has risen in price by 20% and has not stopped.
Conclusions
The price growth in the first half of 2022 surpassed the forecasts but has not reached the historical high of 2014. This trend is likely to continue, driven by the interest of buyers. However, housing offers in popular areas of the city are scarce. Due to the limited territories, the shortage of offers will only be higher. Therefore, don’t delay the decision to buy a property in the metropolis, otherwise, you may miss out on the most attractive-investment deals. Professional brokers of Emirates.Estate will help you choose the right housing and provide legal support for the transaction.
