Current state of real estate market in Dubai: why you should invest now
Property in Dubai
After a massive upheaval and congestion, Dubai’s real estate market is in full recovery and has taken off with new government initiatives, the return of international investors and the launch of unique projects. Lots of people want to buy a villa in Dubai by the sea and let us think why now is the best time to invest in the real estate of the emirate.
Developing of real estate in Dubai
The current market recovery in the emirate began as early as November 2020, when the industry bottomed out in its downward development, and the first six months of 2021 only confirmed the sector’s V-shaped parabolic recovery, according to a new study by the investment and technology platform SmartCrowd. The total volume of transactions in the first half of the year increased by 74% compared to the first half of 2020, while the value of real estate transactions increased by 113% over the same period.
With a lack of new offerings in Dubai’s most sought-after areas and prices at levels last seen in 2011, the market is seeing a positive buzz and consequently an increase in demand for existing properties. And for this, experts name several fundamental reasons, the most important of which was the state policy to introduce attractive schemes for obtaining visas and residence permits for investors and professionals.
In addition, incentives to support entrepreneurs and the private sector, proactive COVID-19 security measures, and thinking around events such as EXPO 2020 have bolstered investor confidence in real estate in Dubai. Although there are no absolute guarantees, all real estate professionals expect that buyer confidence will continue to grow until the end of the year 2022.
According to the mentioned report, finished properties attracted the most attention of investors in the first half of the year:
- 72% of the total volume of transactions
- compared to 28% of transactions with unfinished off-plan properties.
SmartCrowd research also shows that the average sales of completed villas increased by more than 19.3% from AED 8,190 (USD 2,229) per sq. m in the first half of 2020 to AED 9,775 (USD 2,661) per sq. m in the first half of 2021. Growth was also observed in the segment of off-plan villas under construction – by 9.3%, from AED 7395 (USD 2013) per square meter in the first half of 2020 to AED 8082 (USD 2200) per square meter in the first half of 2021. At the same time, prices of finished apartments increased by 8.7% year-on-year, while prices of apartments under construction fell by an average of 9.5% compared to the same period last year.
The report also says that the average price per square meter for off-plan housing under construction fell by 3.42% compared to the first half of 2021, and this is due to the abundance of new offers in the affordable housing segment, which is putting pressure on average prices.
New start with new investors
Dubai real estate experts note the presence of both international clients and the UAE residents in the sector. Some investors today are willing to invest heavily to earn some of the highest returns on housing investments in the world, but there are also home buyers.
“We have guests who come as tourists and those who use short-term accommodation for long-term stays. Since 2017, the most interesting change has been the development of new areas and the demand for them from guests,” says Anna Skigin, head of a short-term rental company in Dubai.
- The notion of Dubai as just a marina, the man-made island of The Palm Jumeirah or Dubai Marina is slowly changing. A great example is the new district of Meydan. With a plethora of new real estate projects to be completed here soon, a mall under construction, entertainment complexes and more, Meydan will become another attraction for residents and visitors to Dubai.
- The real estate market is also developing according to the type of clients that the emirate attracts. Recently, the emirate has witnessed an influx of foreign visitors who are coming for the first time and are looking at the city as a destination for investment in housing. There is a growing middle class in the world that has money and sees the city as an interesting property investment opportunity.
Of course, attractive mortgage rates, lucrative payment plans for off-plan properties and new visas have played an important role in this growth, but more importantly, experts say, the emirate is becoming in people’s minds a place where they can imagine a new life.
Last year was a big test for the city. Tourism came to a halt for several months, with many people losing their jobs and leaving. Businesses closed and real estate prices plummeted. However, around the fourth quarter of 2021, a recovery has begun as Dubai has become one of the safest places to visit, with one of the highest vaccination rates in the world, another underlying reason for its rapid rebound.
Real estate agency in Dubai
As with any crisis, new opportunities are opening up now, as we have seen in the past six months – new investors are coming in and buying property, people are moving to the emirate and new businesses are opening up. Visit Ax Capital agency website and choose a property to your taste.
