In July 2022, recording a yearly rise of >60% in total sales volume and about 80% increase in the value of properties sold, Dubai property once again can be seen on investors’ radar. However, strong investors-incentive policies are to be credited for this growth, there is more subtext to this.
Introduction
Symbolic of opulence and grandeur, Dubai in a real sense is a haven for the real estate sector. However, similar to other markets, the global city of Dubai too had borne the consequences of the pandemic. During that period the property prices in the city had gone down and sales have also been adversely affected. Nevertheless, the first half of the year 2022 revealed some promising trends which are most likely expected to change the course of Dubai’s realty market. With a major spike in property transactions, realty activities have picked up in the city and there have been visible green shoots of recovery.
But is it safe for now to anticipate that several factors have appropriately positioned the city on the investors’ radar once again? Let’s find out!
Table of contents
Quick Glance at Most Transacted Locations (July 2021 Vs July 2022)
As one of the global markets that attract individuals from all parts of the world for study, work, or leisure, once the pandemic-induced restrictions were uplifted, the emirate noted a huge influx of investors. Translating the similar sentiments, the sales activity can be clearly seen picking up.
For instance, according to Dubai Land Department (DLD) data, registering more than a 60% yearly surge in total sales volume, the total number of real estate sale transactions stood at 7,159 in July 2022 as compared to 4,409 in July 2021. Whereas an impressive rise of >80% was witnessed in the value of properties sold as well.
The top areas of interest in terms of the total number of transactions also showed a slight deviation. In July 2021, where top areas of interest included Business Bay, Dubai Harbour, and Sobha Heartland, one year later, the same list featured Dubai Marina and Burj Khalifa as well among the top five most transacted locations.
Major drivers and emerging trends
Dubai has been investors’ most sought-after property market for over a decade, given the favourable policies. However, in the past few months prudent administration and announced Golden Visa relaxations have further added to its advantage. As a result, despite rising interest rates, a surge in transactions was noted strongly backed by investor-oriented policies.
Besides that, the Ukraine-Russia crisis has also nudged a large number of Russians to consider investing in Dubai’s real estate segment in the wake of Western sanctions. Adding on, as UAE is widely known for its investor-friendly practices, the market has all the lucrative offers to attract high net worth individuals (HNIs). As investment in Dubai attracts no annual property tax, income tax, rental revenue tax, or Value Added Tax, cash-rich investors are assured that their earnings are safe. This also allows investors more flexibility when it comes to purchasing property and, in turn, getting higher returns. These factors have further resulted in bolstering the dominance of Dubai as an investors’ preferred destination for at least the upcoming 5-7 years.
Way Forward
With a large number of expatriates and HNIs entering the city drawing local as well as global buyers, undoubtedly Dubai’s real estate sector is anticipated to be touching new heights in the years to come. Be its premium quality of life, high rental yield, top-notch infrastructure, solid capital appreciation on investment, and noteworthy economic growth, the Dubai property market has multiple good reasons. Moreover, with the increased focus on multi-sectorial economic growth, the city of emirates is all set to prosper in the coming years by attracting top talent from around the globe and enjoying higher foreign direct investment.
