Thinking of buying or selling property in Dubai? Never has there been a better time for both here we explore the reasons why. Dubai is a well-known city in the Middle East and around the world. Since the outbreak, property prices have gone up in a way that has never happened before. We analyse the data to determine the causes of the upturn….
Real estate in Dubai
The real estate market in Dubai, the UAE’s most populous city, is flourishing, with the city having its most lucrative day ever for property sales at the end of June. Real estate transactions in the emirate reached AED 3.9billion (£890million) on the last day of June, the best monthly sales numbers in the past 13 years. This is indicative of rising sales during the first half of 2022. This is because of huge investments from Europe, Asia the US, Russia and the Middle East.
A startling 65 percent more real estate deals were made in Dubai in the first five months of 2022 than in the first five months of 2021. This year’s total is 34,126 deals, up from 20,713 in the same time period in 2021. (Dubai Land Department). Compared to May of 2021, the number and value of real estate transactions in the emirate increased by 52% and 66%, respectively.
The Dubai real estate market is booming, especially for off-plan (new construction) flats. The United Arab Emirates’ (UAE) more lenient Golden Visa regulations, together with a slew of new construction in Dubai’s posh Marina, Business Bay, and Downtown neighborhoods, have helped propel the industry. Many wealthy people from across the world, especially Russians, are deciding to put their money into the high-end real estate market in Dubai. This is due to the effective reaction to the coronavirus epidemic and ongoing safety procedures, as well as the emirate’s investment attraction as a result of the new rule allowing foreigners to entirely own a Dubai-based firm without an Emirati shareholder. Around $4.0 billion in wealth is projected to relocate to the United Arab Emirates in 2022, according to the most recent Henley Global Citizens Report.
One estate at the Bulgari Resort in Jumeirah Bay Islands sold for AED 82 million ($18.7 million), while another home at the Dorchester Collection in Business Bay sold for AED 65 million ($14.8 million).
How much does a typical home in Dubai cost?
Dubai’s average prices saw their highest annual growth rate ever in the first half of 2022. The average price of off-plan residences in Dubai jumped 60 percent from June 2021 to June 2022, according to DXBInteract, from AED 854,000 (£196,000) to AED 1.36million (£312,500). Apartments on the secondary market (also known as resale) increased by a relatively modest 5% year-over-year in June, to an average of AED 1.05 million (£241,000).
Villas in Dubai have had a very different experience. Villa prices for both resale and off-plan developments rose during the first half of this year, albeit at a considerably more gradual pace than in the same time in 2020. (six per cent and 9.6 per cent respectively). The data analyst also noted a decrease in pricing from June 2021 to June 2018, with resale villas settling at AED 2.7 million (£621,000) and off-plan villas settling at AED 1.8 million (£414,000).
In the first half of 2022, developers in Dubai will have built 20,000 flats across 52 projects, an increase of 30% over the same period in 2021. But during same time period, another 18,000 units were introduced (across 67 projects).
What are the advantages and disadvantages of investing in Dubai real estate?
Dubai is riding high on the success of hosting the World Expo, adding to its reputation as a global commercial and tourism powerhouse in the Middle East. The emirate hosted the major worldwide event from October 2021 to March 2022; it had originally been scheduled to take place in 2020 but was postponed owing to the lockdown.
After Dubai has a taste of the excitement at the Grand Prix in Abu Dhabi, the rest of the year will be filled with positive vibes thanks to the FIFA World Cup in Qatar (November 21st to December 18th). International football fans are drawn to Dubai as a home base because to its closeness to Qatar and its world-class services and entertainment. Real estate agencies in Dubai’s Downtown area indicate an increase in bookings for the duration of the event, and the city’s airlines are increasing the number of daily flights to Doha to accommodate the influx of visitors.
The United Arab Emirates (UAE) has a plan to diversify its economy (UAE Vision 2021) and an industrial strategy (Industrial Strategy) for the future (2020s). The building of the Etihad Rail system is a good illustration of this. Currently under construction, by 2030 this railway route connecting 11 cities in the seven emirates of the UAE would have carried more than 36 million passengers annually. Once operational, the train ride from Abu Dhabi to Dubai will take only 50 minutes, and numerous neighbourhoods stand to gain from the line’s connectivity.
Dubai has been increasingly appealing to investors in recent months due to a number of macroeconomic factors, including growing inflation and interest rates in the United States and other Western nations and the euro’s depreciation versus the dollar. Due in large part to the fact that its market is not mortgage oriented, Dubai’s economy has historically shown remarkable resistance to the effects of the mortgage crisis. The fact that most non-nationals pay almost no taxes in Dubai adds to the city’s allure as a destination to settle down.
The Golden Visa era is here!
The introduction of the Golden Visa programme in the United Arab Emirates in April contributed to Dubai’s rising appeal with international visitors this year. Those from outside the emirate can now qualify for renewable long-term residence (five or ten years) by acquiring a home or properties in the emirate with a total value of AED 2 million (£461,000) or more. These properties can be either newly constructed or previously owned. Different types of applications have different Golden Visa criteria, but in general, the visa allows the bearer and their families to work or study in Dubai.
Meanwhile, in March 2021, the UAE issued a one-year residency permit for remote workers, a so-called digital nomad visa, in an effort to entice young overseas professionals and strengthen, in particular, its technology industry. The visa allows the holder to work for an international employer and still avoid paying income tax in Dubai.
