Reduce Restrictions Due to the Pandemic: Dubai Real Estate Set to Pick up Growth Momentum
The government has removed the majority of the limitations related to the epidemic, which will help the tourism, aviation, hospitality, logistics, and retail sectors, analysts believe, and Dubai real estate appears poised to resume growth.
According to analysts, senior executives, and industry experts, the eased travel restrictions that were enforced to prevent the COVID-19 outbreak will mostly benefit the property sector. They claimed that real estate maintained a consistent growth trend even during the epidemic, and it will now gain momentum as investors have fewer limitations on visiting and investing in the UAE.
Real estate will continue to trend upward as long as there is a strong demand in the market, according to Haider Tuaima, director and head of Real Estate Research at ValuStrat.
"We can anticipate continued high momentum in terms of demand for end-user as well as investment properties in Dubai. The pandemic restrictions haven't dampened the market, as a record number of sales have continued during the last 21 months. "However, this trend could change due to the rising cost of living, rising mortgage rates, a stronger US dollar, and anticipated new supply," Tuaima told Khaleej Times.
As investors and end users hurried to buy properties in the emirate, recent data shows that Dubai real estate had record sales during the first nine months of 2022.
"With more than 67,000 transactions taking place between January and September 2022, the overall sales value exceeded Dh180 billion, setting a record for the first nine months of any year for sales value." According to the most recent data from the Dubai Land Department, the emirate previously registered Dh116 billion in the greatest sales during the comparable time in 2009.
Promising future ahead
According to Imran Farooq, CEO of Samana Developer, the relaxation of COVID-related regulations will hasten the expansion of the real estate industry.No COVID restriction will encourage more travelers, and more in-bound visitors and tourists will mean Dubai real estate will experience an increase, Farooq, who spoke to Khaleej Times. "It's a moment where the globe just wants to forget about the pandemic and go on."
According to David Abood, a partner at the real estate consultant CORE, the Dubai real estate market has maintained its strong pace since the beginning of 2022, with robust growth seen across performance measures for all asset classes.
"Transaction volumes kept increasing, with the third quarter of 2022 marking the second-highest number of transactions overall and the greatest value of secondary market transactions closed in a quarter."
"We expect socio-economic sentiment to improve further as we return to pre-pandemic levels with travel, mobility, occupancy levels, and regulations (particularly the recent announcement that masks are no longer required, with some exceptions)," Abood told Khaleej Times.
HNWIs to lead
The real estate market in Dubai has a reputation for being extremely resilient to outside influences. Real estate in Dubai has already attracted the interest of numerous overseas investors and HNWIs. The GDP is significantly influenced by travel and tourism, which also has a big impact on another commercial, industrial, and economic elements.
Villa sales dominate
Although prices for villas and townhouses have increased by 52% from the pandemic's low, they are still below their 2014 peaks. The cost of villas in Emirates Hills and Palm Jumeirah has risen significantly from its 2014 peak. As more millionaires and billionaires move to Dubai, luxury properties are becoming more and more attractive.
Villa supply constraint
According to Abood of CORE, villa demand will continue to be high.
The need for larger unit types, particularly villas and townhouses with sufficient usable outdoor space and masterplans offering a variety of amenities and a strong sense of community, remains a key decision driver for many residents, particularly for families with children. "Yes, the reason for the increase in villa prices and occupancy rates is the strong demand for villas, thereby creating a supply deficit," he said.
The majority of current villa occupants would choose to move to more inexpensive places to continue living in villas, he said, even if we expect some demand to shift from villas to apartments as a result of the high prices.
In Dubai, there is an increasing demand for villas. In August 2022, prices in Dubai Hills Estate and Palm Jumeirah rose by 11.5 percent and 18 percent, respectively. The ultra-luxury market will expand more slowly, although beachfront real estate is predicted to keep expanding.