Dubai, a cosmopolitan and thriving city, is famous for its breathtaking skyline and premium lifestyle facilities. Besides that, if you looking for a safe haven, where your money will be secure and free from market fluctuations? Dubai is the place where you should be, as its real estate sector is poised for growth. It is set to grow exponentially in the future and make a great option for real estate investments.
A sprawling city with a collection of towering skyscrapers, luxurious villa communities and exclusive residential developments. It is also home to man-made islands where you can enjoy vast sandy beaches along with the finest residential facilities. The city is one of the safest places in the world, and it has plenty to offer to tourists and investors alike. As it continues to flourish and prosper, there is no doubt that there is no other city like it and a better place to live now and in the years to come.
What could affect Dubai property market?
However, the “over-supply” of properties is one of the major issues that has inundated the Dubai realty market in the past few years, especially during the global pandemic. Though the statistics hardly show it but a majority of real estate experts are of the same views. To curb the issue, the UAE government had also set up a committee – comprising Dubai’s largest developers to plan and manage supply in the property market.
“That committee has brought changes in a big way,” Farhad Azizi – the chief executive officer of Azizi Developments said in an interview. “They have made it more difficult for anybody to just become a developer.”
Now it is necessary to examine how to avoid its pitfalls.
Over-supply can lead to moderate property values
Dubai real estate is one of the markets that has experienced growth and turnaround during the pandemic, when it managed to attract international property buyers. However, the over-supply of properties in the market means that the property values will remain moderate this year, too.
In 2022, 36,000 homes will be finished in Dubai, according to a conservative estimate, which is not much of a change from last year’s 37,000 completions.
Developers to be held accountable
To curb the over-supply issue, the UAE government committee now requires the developers to provide specific delivery dates for their projects and adhere to that – or be ready to face penalties, if they fall behind.
The development companies are directed to complete 50 per cent of the construction process before they could access their escrow accounts, compared with 20 per cent before the committee was set up. It is another sound step to automatically control the supply. Over-supply will be managed better, in this way, states an expert.
Comparative analysis of Dubai property market
As compared to 2014, property prices have fallen by more than a third before a rebound in demand for properties in Dubai, which led to record sales. However, in 2021, the property prices increased by around 10 per cent on average, driven by higher demand and prices in houses, villas and townhouses – as people working from home during the pandemic sought out bigger houses.
Despite there being a rise in property prices, Dubai properties are still cheaper than London, New York and Miami and other developed realty markets. Though there is a hike in prices but the market will remain a buyers’ market in years to come, unless there will be a big event to fuel up the Dubai property market.