Growth and prosperity are certain to happen in Dubai real estate. The various trends and forecasts define upward growth in Dubai's real estate market sector.
Expo 2020:
Export 2020 has had a great impact on the economy of Dubai. It was supposed to bring an investment of approximately 122.7B( USD 33.4 B) as per the report of Ernst & Young. Various incentive has been introduced like the new green visas, reduction of LTV to 20% for people who are buying homes for the first time, and so on. Dubai's real estate sector has experienced a huge amount of investors attracted from all across the world due to this. The property sales in the third quarter of 2021 hit a new record of AED 22.2M( USD 10 m).
After the Expo 2020 was held the premium high rises of Palm Jumeirah and Emirate Hills were the major centre of attractions for the investors along with Business Bay and Downtown Dubai. Approximately 50% growth in sales was observed in The DAMAC Hills, MBR City, Dubailand and other places. MBR City's rise was by 10.5% in their sale price and Palm Jumeirah 18.5%. The prices had also gone high by 21 % in Arabian Ranches and 19.2% in Jumeirah Park. The prices are going to go high by a further 5% to 10% as per the trend going for off-plan residences villas and townhouses. We can see that after the Export 2020, more developers and investors and home buyers are flocking to the city proving a positive trend in Dubai’s real estate forecast.
Investors are attracted by the capital appreciation, Global appeal and high rental yields of the residential sector. There is a fast-rising demand for commercial properties since Dubai is turning out to be a major business hub. So more office spaces are in demand. The demand for the hospitality sector after Expo 2020 has brought in more potential for investors. According to the Dubai Land Department 3.02 million dirhams, was the transaction value in Dubai's real estate sector in 2022. So we can see that Expo 2020 brought a ripple effect on Dubai’s real estate sector making it a promiseably profitable venture for the investors in future.
Economic Growth And Stability
Due to the surge in interest rates, global property has shown a downward trend in market value but in Dubai, we can see that the market is still high. The cash-rich investors are the main reason for this. Approximately 70 to 80% of the total transactions are done in cash in Dubai whereas in the rest of the world like UK and US, it's 20 to 40%.
There is a remarkable rise in the price of Dubai's real estate in the prime locations of Emirates Hills and Palm Jumeirah by 13.5% in 2023. This is one of the greatest price hikes and will be increasing further even more than Paris on New York as per Knight Frank's prediction. The demand for luxury properties has increased by 50% in 2023 and it is going to increase further in the upcoming years, thereby leading to a rise in Dubai’s real estate market forecast.
The next driving factor for the increase in demand for Dubai's real estate market is the demand for Overseas-based Ultra High Net Worth Individuals(UHNWIS).
Post-pandemic we have seen that billionaires like Mukesh Ambani have purchased a 5534 square metre of land in Palm Jumeirah for $ 163.4 million and a Mansion worth 18 million dollars.
According to Knight Frank, Dubai is one of the most affordable luxury residential markets in the world. The residential places have noted an increase of 89% in 2022. The rise in the price by 29% in the last quarter of 2022 is due to the demand by UHMWI.
The value of transactions of the Ultra Prime Villas has also soared high to around 10 million. According to Knight Frank in 2021, only 93 Ultra Prime homes were sold whereas 150 were sold in 2022 which is going to rise further in the upcoming years. Palm Jumeirah has seen 100% price growth post the pandemic. Dubai’s real estate market forecast says that there will be a further hike in the price of luxury apartments leading to a more profitable venture for Duba’s real estate investors.
Dubai's real estate market has also been influenced by investors seeking haven post-Ukraine-Russian war.
Dubai has taken certain environmental initiatives like the Dubai Clean Energy Strategy 2050 and the Dubai Smart City Project for sustainable development of the city. This will make Dubai Global Centre for a Green Economy and Clean Energy. Dubai’s real estate market forecast predicts that this growing trend will attract more investors who are highly concerned about energy-efficient and eco-friendly communities.
Demand And Supply Dynamics
The demand and supply dynamics in Dubai's real estate market are affected by the rise in population, development of tourism, economic stability and favorable government policies. By proper analysis of these factors, we can well forecast the growth and stability of Dubai's real estate market in the future. A proper balance between demand and supply has helped the real estate market to flourish. The infrastructure development, the sentiment of the stakeholders, and the stability of the market have all added to the potential growth of Dubai’s real estate market thereby leading to a profitable venture in the forthcoming years.
The growth in Dubai’s real estate market is a CAGR rate of 8.5% making it to 39 billion by the end of 2023 leading to further growth in the forthcoming years. Post-pandemic major economic reforms have taken place in Dubai. The Five- year and Ten- year residency visa will lead Dubai's real estate forecast to a potentially profitable place.
Dubai's real estate market forecast depicts that there will be a massive trend for more real estate investments from all across the world in 2025.
