Three Reasons Why Demand For Properties in Dubai is High
Properties in Dubai are booming these days. The price of property has come down and demand is high. The recent influx of investors into the real estate market has boosted the overall economy. This is good news for property buyers, as prices are still relatively low. The economy has also been boosted by the upcoming Expo 2020. The property market in Dubai is likely to increase over the next couple of years, thanks to this surge in demand.
Property prices are low of Properties in Dubai
The UAE real estate market has seen a surge in activity in the past six months, fuelled by record buying from international investors. But there are many people who own property in Dubai who are wondering when is the best time to sell? According to property services company Asteco, more owners are considering selling now, with property listings rising by about 10 per cent from October to December. This trend suggests that sellers who have realistic expectations are confident that their asking price will be met.
Although the recent real estate market has drawn the attention of investors, the vast majority of property sales remain aimed at end-users. This trend has remained consistent since the property market in Dubai started to climb. As well-off individuals wanted to make more money, they began to sell off their old apartments, villas, and townhouses in Dubai, regardless of age. But the trend is unlikely to continue.
Demand for property is high
The demand for properties in Dubai is high. This is despite the recent slump in global oil prices and the associated pandemic. While this has tempered the demand, there are some reasons for the recovery. The booming online learning and remote working sector, along with government initiatives, have helped to improve sentiment. And, despite the credit crunch, the region is still considered a safe bet. Here are three reasons why demand for property in Dubai is high:
Increasing international business is driving the demand for properties in Dubai. The tax-free status and modern infrastructure attract international investors. In turn, this has led to an increase in construction activity. Several new buildings are constructed every year. Residential properties are also undergoing a trend toward modern architecture. In fact, buyers are choosing between traditional Emirati homes and sleek, modern homes. The demand for property in Dubai is high, despite the rising prices.
Expo 2020 has revived the real estate sector
The host city of the 2020 Expo will bring in AED 27 billion in investment in the construction sector, helping the local market grow. The construction sector is in desperate need of such investment as it has been suffering from oversupply. Expo 2020 will provide the much-needed boost to the real estate market. According to the Dubai Land Department, the Expo will add up to 300,000 new jobs and revive the real estate market.
The influx of visitors and a rise in construction activity have also revived the real estate industry. As a result, more loans are being approved for projects that are newly handed over. Loan volumes for townhouses rose by 58.9%, which reflects a strong demand. However, global inflation is pushing up construction costs, pushing prices higher. Furthermore, fewer new developments will be built in the future, limiting the supply and driving prices even higher.
Returns on investment for residential properties in Dubai
As a prospective buyer, you may wonder what returns on investment for residential property in Dubai are expected to be. The fact is that returns can vary significantly depending on the location, type of property and rental rates. Nevertheless, if you invest in a property in a desirable location such as Dubai, you should be prepared to experience a steady increase in its value over the years. Listed below are some of the key aspects of returns on investment for residential property in Dubai.
The city of Dubai enjoys colossal influx of people. In fact, it receives 17 million visitors a year, and five million during the Pandemic of 2020. Tourists, business people and highly qualified labor migrants also flock to Dubai in search of a good place to live. Demand for rental properties is high, and developers have reported annual profit growth of up to 250%. However, a large portion of new apartment supply is concentrated in areas near major highways.
European buyers for Properties in Dubai
European buyers are driving a massive rebound in the property market in Dubai, with secondary market prices up as much as 15% in the last two months. The demand is coming from a wide range of buyers, including private investors, businesses, ordinary families and individuals. Many European investors are also purchasing high-end properties in popular areas, including Bur Dubai and JBR. In addition, the current geopolitical situation has created an environment of fear, with many Europeans looking to buy elsewhere.
The properties in Dubai have seen the strongest selling figures in the last quarter, driven by European investors who have stepped up their presence in the UAE. The market is seeing a high demand for villas of three to six bedrooms, which will benefit buyers long-term by making them more valuable. Luxury beachfront living is a crucial product for the real estate market in Dubai. The demand for beachfront homes has risen by 20 percent in the last year, with many buyers from Europe.
Rising house prices
After three years of slump, the residential property market in the UAE has seen its prices rebound. The economy has been buoyed by the eased COVID-19 restrictions imposed on hotels. While Dubai is still heavily dependent on tourism, a weakened supply could help boost demand. Meanwhile, a curtailed supply is likely to hinder price increases. However, rising investor confidence is encouraging and this could lead to an increase in prices.
The surge in demand has extended into the early months of this year. In fact, April was the busiest real estate sales month in Dubai since 2009. A rising middle class population, the emirate’s attractiveness as a base for a retirement home, and a strong global economy are driving demand for prime residential properties. And while prices have increased sharply over the past year, villas continue to outperform the market.
Rise in population of high-net-worth individuals
The properties in Dubai have experienced a spike in new project launches in the first quarter of 2022, with the city emerging as a haven for high-net-worth individuals, entrepreneurs, and millionaires. The city’s economy is on the rise, boosted by a recent health pandemic and visa reforms. The first quarter’s announcements of new projects are more than twice the volume of pre-pandemic figures. Together, the new projects comprise 6,677 residential units.
The real estate market in Dubai is being driven by a number of factors, including low supply of ultra-prime properties, an influx of HNIs, and the Russia-Ukraine crisis. There are also competitive entry costs for foreign investors. The growth in population of high-net-worth individuals is a key reason behind the rise in demand for properties in Dubai.