The condition of the Dubai Real Estate Property has been the subject of numerous discussions lately. Over the past twelve months, several consulting businesses have reported decreases of between 10% and 15%. Prices have decreased in the rental market as well, though to a considerably lower extent. Due to the lower purchase price compared to the obtained rent, real estate buyers entering the market now are experiencing better rental yields.
Market conditions today are caused by a variety of causes, many of which are local to Dubai and the rest of the world’s economy. Fewer jobs, the strength of the US currency, and rising oil prices are just a few of the causes.
Even though it’s difficult to anticipate where prices will go from here, people believe that prices are soon to bottom out and stabilize. Dubai continues to see economic and population growth and has solidly cemented its position as a sanctuary for the whole Middle East. These are only a few of the factors that, in our opinion, make a real estate investment a wise decision in the short and long terms, along with the impending upcoming expo.
Some of Dubai’s biggest developers, who have kept releasing and selling out new projects, appear to share the same mindset as the aforementioned statement. Earlier this year, Serena villas from Dubai Properties were introduced and quickly sold out. This was only recently duplicated by Emaar, who quickly sold-out 52|42, a new development in the Dubai Marina. These kinds of accomplishments are a great testament to the strength of the Dubai real estate investment and a resounding vote of confidence from both domestic and foreign investors.
Future Prospects of the Dubai Real Estate Market
The second half of the year 2022 got off to a fast start, continuing the pace of success. 7,092 transactions were recorded in July 2022, up 63.56 percent over the same month the previous year. With this, the number of real estate transactions for the year as a whole has broken a record and reached 45,793, the most since 2009. Despite this, typical prices of property in Dubai are still lower than they were during the 2014 high.
The Dubai real estate market outlook indicates that the average prices will soon experience a major increase due to the sector’s expansion.
Let’s investigate further to discover the aspect that will affect the performance of property development in 2023.
Villas will rule the market
For a few years now, the villa market has been the market’s main driver. They have seen price increases from quarter to quarter, making them popular residences in Dubai. The apartment market, on the other hand, has had difficulty as a result of the price increase being under 10%. However, current data indicate that this industry is also experiencing positive expansion in real estate investment.
Experts in real estate predict that Dubai villas will continue to dominate the market. According to the Dubai property market prediction for the short term, key locations including Arabian Ranches, Palm Jumeirah, and Dubai Hills Estate will continue to rise, drawing both investors and end users due to their high ROI and luxury lifestyle, respectively.
The influx of HNWIs and foreign investors
For many years, the Dubai real estate property has worked to build a reputation as an investor-friendly market. But recent events have increased its allure for investors. Because of the increased safety, outstanding growth, and numerous prospects, HNWIs also favour this sector.
The market is expected to grow more open and alluring for real estate buyers and HNWIs with additional reforms, including Dubai’s relaxation of the requirements for golden and silver visas. More money will be invested, and the ROI will be better.
Demand for Ultra-Luxury Properties is Growing
In Dubai, there has been a noticeable rise in the demand for ultra-luxury homes. The demand for property in Dubai will continue to grow, according to the Dubai real estate market outlook, particularly for the second half of the year. With property sales of $10 million or more in 2022, a new record in this industry is anticipated.
From January through June, according to the H1 data, 82 ultra-prime deals were registered. These are the Dubai homes that fetched more than $10 million at auction. Given that 93 sales were made in this industry for the entire year of 2021, this is a significant increase over that year. This was a record in and of itself, and because we are just 11 transactions behind, it will be easily broken in H2.
In 2023, the same pattern is anticipated to hold when discussing the forecast for the Dubai real estate property. However, whether or not the future year will be able to break this record will depend on time.
Will the real estate market in Dubai collapse?
We continue to believe that the low-interest rates, the relatively young population, the diversification of the economy, and other variables will make the Dubai real estate property one of the strongest markets globally over the next three to four years.
Investors are likely to wait for high-quality and better-performing real estate investment trusts (REITs) in nations with lower macroeconomic concerns, in our opinion. Investors have also noticed a focus on REITs in growing markets, such as the UAE and other GCC nations.
Before choosing certain industries or companies for their portfolios, investors carefully consider economic growth predictions, country risk, and interest rate sensitivity.
Will Dubai’s real estate costs decrease?
Due to the dismal forecasts for economic growth and property development, we do not anticipate a decrease in Dubai real estate prices in 2022–2023, particularly for houses aimed at the upper end of the market. Given that there is a strong demand for high-quality residences that are now being built, we do not believe that property prices in the premium segments are going to decrease. However, if oil prices continue to fall, the supply of luxury housing developments may somewhat grow, which would create an oversupply.
Conclusion
Dubai became one of the world’s most sought-after centres after receiving building investments of $33 billion in 2020, according to statistics from Abu Dhabi Invested. Property developers are now focusing on broadening and growing their portfolios rather than just investing in retail enterprises like shopping malls, offices, and hotels. The near future is also likely to see more of this. Dubai’s real estate market prognosis is another.