Dubai is an attractive destination that offers a glimpse of history, culture, beaches and luxury lifestyle. It has jostled its way on the global platform in recent months, not entirely due to Expo 2020 that has put Dubai on the map. It is not just due to conducting a successful global event but the UAE’s government response during and after the COVID-19 that has bid adieu to any scepticism about staying in Dubai. The city has positioned itself as a safe haven to invest and live in.
A significant credit goes to the government for bringing in major reforms including changing the weekend to align the country with the West, easing visa restrictions, and introduction of new residency visas along with new foreign business-friendly rules and regulations. Resultantly, high-net-worth individuals flocked to the emirate that led to an increase in the prices of luxury properties.
A majority of industry experts are of the view that Expo 2020 was a catalyst of change that brought people to Dubai but the city’s investment-oriented rules, market reforms, new residency visa plans and business-friendly policies will keep the emirates on the radar for a long.
Another factor was Russia’s war on Ukraine that pushed the oil prices to record high values and fetched economic turmoil in the region. Resultantly, wealthy investors from both countries (especially) and the Middle East region (generally) rushed to Dubai to invest their money in a stable residential market.
“I wouldn’t give Expo all the credit for residential property price increases,” said Sapna Jagtiani, a director at S&P Global Ratings. “It was mostly driven by how the UAE managed the pandemic and high net-worth individuals moving to the country. We have a lot of oil money that finds its way to Dubai real estate, as it is considered a safe haven where investment flows whenever there’s conflict.”
Experts have raised some concerns post-Expo even that there can be some economic turmoil that can aggravate Dubai’s debt and over-supply problems – if the forecast of demand fails to materialize for the real estate sector.
However, the S&P Global report highlights that Dubai’s safe haven status will continue attracting investors from all around the globe, despite the economic turmoil from any geopolitical event. The market is not just stable but is all set to enjoy growth and continuous progress this year onward from a rebound that started in the last year.
The S&P Global report noted that the gross domestic product of Dubai will rise by 2.5 per cent in 2022, and 2 per cent in 2023. According to the report, stronger oil prices will help Dubai achieve economic growth in 2022.
Dubai property market will not just experience stability but a moderate increase in property prices, rents, capital appreciation and increased sales volume from 2022.
Another excerpt from the S&P Global report highlights that developers’ revenue growth will also accelerate over the next few years, which was tempered by an over-supply of residential properties and the completion of new developments.
With Dubai property prices showing an upward trend in 2021, the property prices are still affordable and prices around 25 per cent to 30 per cent below the peak values in 2004.