The real estate market in Dubai has been surprisingly transformed in recent years: from something closed and difficult in terms of prices and sale procedures to loyal and attractive one. The official source https://emirates.estate/ will tell you about what the UAE housing market is in 2021, about its nuances, as well as what prospects and opportunities it offers.
Market state at beginning of 2021
The last two years have been a serious test for Dubai. In the period from 2019 to 2021, there were serious fluctuations in the market: from a fall to an unprecedented growth. The recession caused by the pandemic was replaced by record demand from the end of 2020 to 2021. Several records were broken for the number of transactions made during the 5-year, 8-year and 10-year demand records.
Problems of Dubai housing sector
2019 and 2020 had a negative impact on the real estate sector, which exacerbated old problems and created new ones.
Supply and demand imbalance
Due to restrictive movement measures, the market was in decline. The oversupply in the market did not pay off due to the lack of demand.
Falling sales in luxury housing sector
Due to the reduction in the influx of people, prices in the Dubai market of villas and luxury apartments have fallen in the country. Rents have also dropped in price.
On the contrary, there is an influx of buyers of off-plan and commercial real estate. Companies that need to expand sorting areas and storage properties were extremely interested in the latter.
There was also a certain growth in the market of studios and small-sized apartments in Dubai. In particular, this was caused by the transition to remote work. Employees of the companies were looking for small apartments in which they could live and work at a reduced rental rate.
The market is on way to recovery in Dubai
In late 2020 – early 2021, a steady recovery and growth began in the UAE. The specific steps taken by the Government in the fight against the pandemic, which, with the gradual introduction of quarantine measures, attracted new expats, buyers and investors.
According to analysts, since the beginning of 2021, more than 8 thousand new buyers have entered the market — 62% of the total number of players. The influx of tourists and the return of all the main categories of the population supporting the construction sector of the emirate contributed to the growth of the market.
With the arrival of new customers, the demand direction was also updated. Now, while square meters and the cost of finished real estate in Dubai remain stable, prices for luxury flats are growing on average from 5 to 10%.
After the arrival of buyers who want to buy apartments in Dubai at a reduced price, the real estate market began to decline, but at the same time rental rates increased in the country. This is due to the limited number of ready-to-rent housing and growing demand. Now landlords have the opportunity to increase their profits.
The most popular areas for buying a home in 2021:
• Downtown Dubai;
• Dubai Marina;
• Palm Jumeirah;
• Arabian Ranches;
• Dubai Hills.
According to the Dubai Land Department, a 25% increase in residential property sales was registered in the last quarter of 2020, which amounts to 11,065 transactions worth AED 22.07 billion. This has become a true indicator of economic growth after a long recession during the period of isolation.
In the first quarter of 2021, 11,753 property deals were made in the amount of AED 25.15 billion, which is already 6% more than in 2020. As for secondary housing, sales increased by 16%. The most popular investment apartments in Dubai are:
• Town Square;
• Amna Tower located not far from the property in Downtown Dubai;
• The Address Jumeirah Gate;
• Bloom Towers;
• Dubai Creek Harbour.
In March 2021, sales on the secondary market exceeded the figures of 2020 by 63%, and transactions on the market of off-plan property in Dubai by 37%. It is also worth noting the increase in the average cost of housing deals. Now the indicators of 2021 exceed last year’s by 24.6% on a monthly basis, in the secondary market by 21.4%.
In May, there was a new record – sales figures reached 6,100 transactions with a total value of almost $3 billion. In addition, 10,000 new customers entered the market.
The average index of investment profitability in different regions of the emirate shows indicators from 4 to 10%. In the period from December 2020 to June 2021, the cost of property in the entire sector increased by 8-10 %. An important event was the increase in sales transactions in the luxury housing market in the prestigious areas of Dubai in the amount of more than $10 million.
Despite their heterogeneity, there are favorable changes in all areas of Dubai. At this stage, analysts predict a stable improvement in the market situation and a recovery of the emirate’s economy until 2022.
Market opportunities in Dubai
Buying an apartment in Dubai means a profitable investment. Now buying a property in the most progressive of all emirates in the UAE will become a smart investment in a potentially profitable housing with a quick payback.
In 2021, foreign investors and businessmen received more opportunities to buy real estate and conduct business. The government of the UAE and Dubai in particular began to actively attract funds from abroad. Thus, new opportunities have opened up for foreigners:
- Simplified obtaining of a residence permit;
- Buying a home remotely;
- Obtaining a business three-year license with the possibility of extension;
- Discounts in the premium segment;
- Receiving an installment plan or a mortgage loan for buying real estate in Dubai;
- Rental housing with high profitability;
- Profitable purchase of off-plan properties with subsequent resale.
The last year and a half has been fruitful for the Dubai economy, largely due to the real estate sector. The number of investors has increased, and new players have appeared on the market, which, in turn, reflects the development of the Emirate and confirms its status as a promising destination in the world.
Emirates.Estate offers clients best property in Dubai
The crisis has only increased the demand for both residential and investment real estate throughout the country. For buyers looking for a new home in Dubai, the house has now become a place to live, work, relax, play with children, play sports, and so on.
It is expected that the residential estate market will remain active in the UAE. If you want to buy a property in Dubai, please contact one of the Emirates.Estate experts for free.