Beth Hirshfeld
Having skillfully navigated the pandemic, Dubai is now opening its doors to the world through Expo2020, and showcasing once again why it is the city of the future and a natural hub for those seeking a welcoming, multicultural, safe, and high-quality place to live.
Strategic and focused on its growth and development, Dubai has quickly emerged as one of the world’s leading cities. And the events of this past year have only accelerated this advancement. From its proactive and capable handling of the pandemic to its global diplomatic leadership and business-friendly initiatives to the launch of Expo2020, Dubai has matured into one of the most attractive, and still comparably under-valued, places in the world to live. Savvy real estate buyers and sellers need to take action before it is too late.
A Blossoming City
The pandemic has been an accelerator for real estate around the world, driven both by monetary stimulus and greater flexibility for people to live/work from preferred locations. Dubai is a major beneficiary of both of these trends.
The UAE moved quickly to curb the spread of COVID without requiring extended lockdowns, and to roll out widely accessible vaccines. As one of the few places where people could travel during the pandemic, Dubai welcomed many new visitors to the region and brought new attention to Dubai’s high quality of life index.
Photo: Dubai Marina
On the global stage, the UAE cemented its diplomatic leadership this past year with achievements such as the signing of the Abraham Accords. These successes are bringing new trade opportunities and business relationships into the region, and opening travel corridors to facilitate millions of new visitors as well as potential future residents to the region.
As the UAE promotes tolerance and inclusion on the global stage, it has also embraced this practice at home. The introduction of a progressive regulatory framework including the UAE Golden Visa and changes to the Foreign Ownership Rules will make it easier for foreign business leaders and companies to expand and settle in the region, helping the UAE and Dubai to continue its evolution into a place where people want to move and settle for the long-term.
And as Dubai opens its doors to the world with the launch of Expo2020, it will showcase all of its remarkable attributes on one of the world’s largest stages. With strict safety measures in place, Dubai’s Expo is preparing to welcome over 25 million visitors throughout the 6-month event, with many staying for longer visits to experience the attractions of the city more fully.
A Short Window of Opportunity
With so much to offer and so much global attention, Dubai’s real estate market has been buzzing and witnessed record sales in the first half of 2021. It has not yet taken off as much as property markets in the rest of the world, but the trend is clearly toward that of it playing catch up.
Photo: Al Barari
Jackie Johns, co-owner of Christie’s International Real Estate - Premier Estates, notes that “the market is currently moving at a fast pace with both demand and transactions picking up speed in the luxury sector—the country has seen record-breaking transactions throughout the year in various neighbourhoods.”
Although Dubai is still relatively affordable per square foot compared with other major cities across the world, demand is starting to overpower supply, with commensurate increases in housing prices. For investors, net rental yields are quite a bit higher than comparable cities, ranging from 6-9% depending upon location, though these are already starting to compress towards those found in other major cities. For real estate buyers and sellers alike then, the time for action is now.
Since November 2020, the average house price in Dubai has risen 16.2%. Property Monitor indicates that housing values have increased for 10 straight months of gains. In August 2021, there were approximately 5,800 real estate transactions valued at almost AED15 billion (US4.1Bn) in Dubai, the second strongest month since 2013.
Villas have seen particularly strong sales growth as many people are looking to upgrade to bigger and more luxurious homes that can serve both as places of work and entertainment. From Johns’ experience, there are no signs of slowdown in this sector, “our clients are consistently expressing a heightened demand for outdoor space, increased square footage, as well as studies or home offices.” Since villas comprise less than 20% of the Dubai residential market, the limited inventory presents a particularly attractive opportunity for sellers, with some areas having experienced a 30%-40% price appreciation since late 2020.
Apartments are starting to see notable price increases as well, and there is an expectation that prices will continue to rise over the coming months, particularly as visitors flood into Dubai for Expo and get a chance to experience the city. “The past year has seen flourishing interest from high-net-worth individuals across Europe,” shares Johns, “Expo2020 is predicted to strengthen overseas interest and confidence in the UAE as a leading cosmopolitan destination, which boosts our expectations for continued growth.”
A sign of the strong interest in Dubai as both an investment hub and attractive place to live, in August 2021, 45% of all sales were for off-plan properties. This is the highest transaction value seen in over 10 years and an indication that people are investing in Dubai and its future. It is also a clear sign that interest in the region is here to stay.
The world has woken up to the power of Dubai. Expo2020’s official theme song is titled “Our Time is Now”. That is true for the city and true for its real estate market. And for those interested in taking advantage of Dubai’s real estate opportunity, there is no time to wait.
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