Dubai’s property market was hit by Covid-19 during 2020 and 2021
Fresh investments have started pouring into Dubai’s property market after the withdrawal of Covid-restrictions and the implementation of new policies, which are welcoming for real estate investors. Covid-19 took a toll on Dubai’s property market, and 2020 and 2021 were sluggish. However, in recent reports, it has been seen that the property market in Dubai has got new investments worth around AED 160 billion in the past eight months of 2022. In the first week of November itself, there have been transactions of around AED 6.2 billion in the real estate sector.
Residential properties are witnessing the maximum surge as real-estate investors have started investing mostly in residential plots, villas, and apartments. Unique Properties’ CEO and Founder, Arash Jajili, said that within the residential real estate segment, luxury properties are most in demand. Luxury villas that have valuations around AED 100 to AED 300 million are selling the most in the past few months. The most discussed transactions of recent times include the sale of 73 land plots whose valuation is around AED 195.5 million. The sale of 769 villas and apartments and the total deal amounted to AED 1.76 billion and included 17 gift deals as well, which amounted to AED 30.97 million. He anticipates this trend to grow further.
Factors working in favor of Dubai’s real estate market
In recent years, Dubai has become one of the significant destinations for traveling, events, and weddings. Dubai property market witnessed a massive surge as the demand increased for new residential as well as commercial properties. The real estate market in Dubai was one of the tops in the world in the previous 17 years, if you go by the statistics, and contributed significantly to Dubai’s GDP and economic growth. Around 13% of Dubai’s GDP was coming from the real estate sector until the pandemic happened.
The recent market revival has resulted from the uplifting of Covid-curbs and the implementation of investor-friendly policies. The policies which have been implemented recently include incentivizing property investment funds to strengthen the fundamentals of the real estate sector and help in attracting institutional investors worldwide. Expo 2020 has been another reason which helped in attracting new investments in the real estate sector and for other industries as well.
Outlook of Dubai’s Property market
It is expected that Dubai’s property market will continue to grow at this pace and add to the GDP. However, the fear of the upcoming recession seems to cloud the outlook to a certain extent. There are many eyes on the Qatar World Cup 2022 as well. The QWC 2022 is expected to escalate the growth in the real estate sector in the Emirates. Since Qatar and Dubai are in close proximity, it is expected that a handful of World Cup visitors will purchase properties in the Emirates post the event either for investment or for living. The occupancy rate is also anticipated to go up above 90% in the upcoming months.
That said, due to exceeding supplies in certain submarkets of Dubai’s real estate sector, the price may come down for those submarkets. However, the overall pricing for the sector is anticipated to stabilise over the next few months primarily due to the strong underlying fundamentals.
Talking about upcoming projects, boutique real estate projects have been a major focus in the current market scenario, given the luxury property investments. These projects will be combinations of luxury properties and high-end restaurants and facilities, which will attract the diversified population of Dubai along with global tourists.