Dubai is one of the most promising real estate markets in the world. With the city showing exceptional long-term performance and returns, the share of first-time property buyers in the city has gone up in the past year. The main reason for this is the positive real estate environment for foreign investors who were settling in the city. A large fraction of investors who are interested in vacant units in Dubai are individuals that have either recently moved to these cities or are planning to relocate in the near future.
A quick note: As per the pre-Coronavirus research data, the Dubai real estate market was getting off to a strong start this year, with a relative increase in sales transactions during the first two months (prior to the Coronavirus outbreak in the UAE), compared to the same period in 2019, which was an interesting year for the residential real estate market in Dubai. The H1 2019 witnessed a 5% increase in absorption rate of residential units and transactions increased by almost 50% in H2 2019 when compared to the same review period in 2018.
Demand for off-plan units has increased since the beginning of this year. This was facilitated by attractive payment plans, borrowing rates and promotional discounts, along with incentives such as partial or full waiver of Dubai Land Department (DLD) fees and also service charges collected for maintenance of the property.
New residential units have either been handed over to buyers or are nearing completion across projects located in Jumeirah Village Circle (JVC), Business Bay and Dubai Silicon Oasis among others, displaying the current oversupply situation in the market. For instance, Bloom Towers, a range of high-rise studios and 1-bedroom apartments in the gated community of JVC, is nearing completion and will be handed over to buyers in Q4 2020.
Around 70% of the new units launched this year were apartments followed by villas/townhouses.
Despite some uncertainly weighing on consumer sentiment and with restrictions on movement in general, the pandemic has impacted Dubai’s residential real estate buyers and rental property investors fairly positively:
- With interest rates now at base rate and the mortgage cap being lowered for first-time buyers, local investors and end users are seeing this as a lucrative opportunity for home ownership.
- More tenants are looking to secure a rental property online under the current coronavirus-induced movement restrictions.
- When looking at medium to long term investment plans, there is probably no better time to enter the real estate market in Dubai than now.
- Residential transaction activity by residents may also increase. According to global real estate consultancy Savills, the experience of working from home for an extended period of time will drive many households to move.
- Any disruption to the UAE’s property sector caused by the Coronavirus pandemic is likely to be short-term, according to Savills. Furthermore, the stimulus package by UAE Central Bank will help contain the pandemic impact and support the property market.
Real estate investment is definitely one of the safest and most profitable kinds of investment in the region. Having said this, however, it is crucial to have a trustworthy real estate expert to guide you toward the best investment opportunities in Dubai.