According to Houzon, leading property agents in Dubai, Dubai continues to be a prime investment target thanks to strong capital growth, high yields, and government initiatives that encourage investment. Among the top five buyers by nationality, Indians topped the list, followed by UK, Italians, Russians, and French. So, let’s have a closer look:
Rising Inflation & Dubai:
Despite signs of a global slowdown in real estate markets due to rising inflation and higher interest rates, Dubai stands to benefit from global uncertainty. The UAE’s fiscal position has improved due to high oil prices.
The UAE will undoubtedly experience some impact from rising interest rates, however, the UAE market has a lower mortgage exposure than most other countries, so the average Dubai consumer may be able to deal with this normalization of rates.
Normalization Of Real Estate Property Market Prices:
Market prices for real estate properties in Dubai appear to be normalizing. As sellers have sought to realize recent price increases, supply constraints in the secondary market have eased. Furthermore, developers have increased launches and expanded Dubai off-plan property sales in response to the improved market conditions.
Why Ex-Pats Are Relocating To Dubai:
More ex-pats are likely to relocate to the UAE as taxes, inflation, and geopolitical instability in the West continue to rise. Employment and visa regulations will continue to be revised by Dubai to attract talent. DLD (Dubai Land Department) has made great strides in the last six months to improve transparency, make information about real estate in Dubai more accessible, and give all investors greater confidence to make the move.
A cooler climate and the World Cup are certain to bring a number of new visitors to the UAE’s shores in the second half of the year. In the coming months, we expect to see interest rates rise, as well as sales prices and rents, rise modestly. In the long run, Dubai real estate remains one of the best investments available, as rates and prices remain low, while yields and capital growth remain strong.
Total Transactions In Dubai Real Estate Market:
The real estate market in Dubai remained active and robust despite rising interest rates and a strong dollar in the first half of 2022. During the first six months of this year, DLD recorded 42937 total transactions. This is 60 percent more units sold compared with the same period in 2021. A total of 85 percent more properties in Dubai were sold than in H1 2021.
Dubai Real Estate Market Statistics:
A 23 percent increase in buyer demand was observed compared to H1 2021, but a 138 percent increase in signed MoUs was recorded. Listings of townhouses in Dubai grew by 141 percent, apartments in Dubai by 18 percent, and villa listings in Dubai by 2.0 percent.
68 percent of transactions were made by investors, while 32 percent were made by end users. Mortgage transactions in Dubai made up 31 percent of all transactions.
There was an average rental price increase of 29 percent for rental apartments in Dubai, 33 percent for townhouses for rent in Dubai, and 64 percent for villas for rent in Dubai. Leasehold and freehold occupancy rates both rose to 90% and 86%, respectively.