Due to favourable investment policies, Dubai has been in the spotlight of investors for over a decade. Although the market suffered during the pandemic, there have been visible signs of recovery in the first half of 2022. The housing market in Dubai is a wise and liquid investment. If you decide to move, it can become a source of consistent rental income, a vacation destination, and a residence in the long run. This investment will be a good use of money. Research suggests that prices in the emirate’s residential real estate market will rise 12.36% by 2026. As a result, purchasing an apartment now will multiply your investment.
Dubai as a Property Investment Destination
Statistics show that a record number of investors managed to buy Dubai property in the second half of 2021, which was one of the best periods for the local real estate market. Furthermore, the Dubai Land Department (DLD) reported 33,102 residential real estate transactions in 2020 and 58,133 in 2021, with 32,398 sales contracts signed in the year’s second half. Experts believe that now is the best time to invest because property prices will rise. Despite the fact that potential market volatility due to the pandemic does not suggest buying for short-term gains, the market has taken off, and Dubai has become even more appealing as a local market investment destination. If you plan to invest, get in touch with professional real estate agents in Dubai.
Analysts note that the results for 2021 exceeded expectations, with sales exceeding previous highs and the cost of capital [notional rate of return] returning to pre-pandemic levels. In 2021, the total number of transactions increased by 72% over the previous year, breaking a 12-year high, while real estate prices increased by 10% at the end of the year. Nonetheless, due to support for economic reforms and an accelerated vaccination program, housing costs and rents in the emirate are expected to rise in 2022, albeit slower. While experts have yet to provide specific figures on rent, they are almost unanimous on the rise in property prices. According to them, prices will rise by about 5% this year.
Expanding Rental Market in Dubai
The return of foreign investors and effective anti-pandemic measures is one of the primary reasons for the active recovery of the rental housing market. Rents have risen even more. Because of the high demand for ample living space in the context of COVID-19, this figure increased by an average of 3% in the apartment sector and more than 20% in the villa sector. Rent growth in high-demand areas for luxury apartments reached 26%.
Budget villas in popular Dubai areas have increased in price by 21%. Villas in high-end areas were rented out at a 41% higher price than before the pandemic. Rates increased in some areas, including Dubai Hills and Arabian Ranches.
Real Estate Future in Dubai
It is no secret that the Ukraine-Russia crisis exacerbated global inflationary pressures. Following the United States of America (USA), the United Arab Emirates (UAE) raised its interest rates by around 1.5%, influencing mortgage rates in the market. However, the administration has been prudent in capitalizing on the ready supply of real estate inventory by announcing Golden Visa relaxations to attract foreign investment. As a result, despite an increase in interest rates, June 2022 saw an increase in transactions, according to reports. The market’s affordability is likely to continue, with more deals closing due to supportive policies. Before you buy a property, hire an expert who can provide reliable property valuation in Dubai so that you know the market value precisely.
Bottom Line
Dubai is expected to maintain its dominance as an investor’s paradise for the foreseeable future. A favourable real estate environment will be kept as many expatriates make the city their “home.”However, as with any foreign investment, it is recommended that each aspect of the transaction be thoroughly examined before signing the documents.
