Dubai Real Estate Market has been at the top of its game for the past seventeen years, both in terms of economic growth and the real estate industry. This is crucial in several ways, particularly for the petroleum, architectural, building, transportation, tourism, and real estate industries. In addition, several of these industries are the driving force behind the city’s expansion.
Dubai’s GDP has been reliant on dominating industries, such as repair and commerce, transportation and storage, real estate, and insurance. These industries contribute differently to Dubai’s economy, with the trading services sector contributing the most at 27.5% and the oil and gas industry providing the least at 6%. Nevertheless, the real estate and construction industry contribute 13% to Dubai’s GDP.
Due to the rising number of visitors and immigrants that visit Dubai each year, the city’s market value has skyrocketed and the hospitality and tourism industries have grown. Dubai is a metropolis that continually introduces new innovations and ideas, and the Dubai Expo 2020 is without a doubt one of the factors that contribute to the country’s rising GDP. After Expo 2020, Dubai’s economy anticipates large international investment and increased growth in the city’s GDP. According to the figures, the exhibition was anticipated to stimulate 10.5% economic growth.
Factors Influencing Dubai’s Real Estate Market
Less Immediate Demand for Dubai Real Estate
In the approaching years, the immediate need for residential real estate may decrease due to the changing lifestyles of individuals. People are drawn to a variety of activities outside the house, which influences the type of property they are willing to purchase. More emphasis is placed on rental properties, properties with extra features, luxury homes, etc.
Fewer Open Houses and Showings
After the release of Covid-19, the face of sales changed. On the one hand, the market for shoes, watches, and clothing rose, while on the other, individuals avoided attending open houses and showings. While the globe struggled with Covid, other markets, including the real estate and construction industries, saw rate fluctuations. This resulted in sellers overcorrecting their pricing in accordance with the market’s graph.
Price Inflation for Housing
It is hardly surprising that there has been a dearth of listings in the affordable housing market. In this environment, individuals are searching for solutions that may be highly valued, but only a select few can afford such houses in Dubai’s real estate market.
There may be many disadvantages to what recent years have brought to the real estate market, but there is never a boring moment while discussing Dubai. Specifically with regard to progress and technical breakthroughs. Dubai’s inventions and technological concepts continue to improve, and the real estate market may become dependent on this variable at some point. Possessing technologically-advanced features in the home will increase its marketability.
The Breadth of Dubai’s Property Market
Dubai, like any other metropolis, was afflicted by coronavirus but was able to quickly recover from its effects, as seen by the property prices fluctuating from the lowest levels to normal levels. All of this led to up to 34.5% of property proceedings. Since 2015, Dubai has been at the forefront of the global increase in the number of transactions. After the pandemic crisis, adjustments have been made to the long-term residence regulations, all in response to the real estate market’s decline in Dubai.
According to the head of Middle East research, Dubai’s residential real estate market had over 15,000 transactions between January and April of 2021. This represents an increase of 34.5% over the same time. While recovering from the back-to-back blows that Covid dealt us, the UAE’s immunization campaign was one of the factors that greatly contributed to the expansion of enterprises and their trade value. In addition, this optimism spread across the Dubai market.
According to the head of Real Estate Research, who obtained the data from the VPI (Valustrat Price Index), the market’s monthly price performance was 0.9%. However, once the epidemic struck Dubai, the value fell by 1.9%. During the middle of the twenty-tens, Dubai saw a relaxation in several industries. This improvement contributed to the positive growth trends, which included a 1.2% growth rate. Moreover, villas saw one of the highest capital appreciation rates, increasing by 3%. Despite the economic decline the city was undergoing, the residential sectors in the first four months of 2021 had significant demand, according to the head of research at CBRE UAE.
Forecasts of the Real Estate Market for Prime Properties
According to the research, the majority of Dubai’s real estate submarkets and brands, including Emirates Hill, Downtown, MBR City, and Palm Jumeirah, have survived. In 2021, the volume of home transactions exceeding $3.6 million increased by 41.1% in a single year.
Since 2015, the first quarter of 2021 has been one of the busiest and most desirable quarters of Dubai’s real estate market. This also bodes well for the future of the Dubai real estate market. Palm Jumeirah, one of the most desirable areas, has seen an increase in residential transactions, which quadrupled in the first few months of 2021. Dubai’s real estate market is expanding as a result of increased demand in comparable regions.
Recently, demand for their Palm Jumeirah properties has increased, resulting in a rise in the average number of transactions for such units. The demand peak increased, particularly between April 2020 and April 2021. In this specific period of one year, the value climbed by 2.4% to a total of 3,800,000 dirhams. The average size of villas has remained unchanged at 14,1 million dirhams. In April, the Dubai real estate market contributed around 2.6% to the overall market value, with a monthly increase of 6.7% resulting in 90 transactions.
Due to Palm Jumeirah’s enviable position, the majority of homes were exclusively signed and sold inside this property brand. 43% of the properties reported were sold only from one location, including 32 residential luxury villas. During the first four months of 2021, villa sales were in high demand. According to the collected data, the projected sale of Palm Jumeirah homes will most likely occur in the next years. This is one of the most sought-after residences on Dubai’s real estate market due to the location’s luxurious features.
In addition to Palm Jumeirah, property sales have increased in other exclusive areas, such as Emirates Hills, notably for villas priced per square foot. Other prominent places include Arabian Ranches, which offers reasonably priced luxury homes in areas such as Town Square. These locations have delivered a substantial boost to the Dubai real estate market, as the figures have consistently demonstrated. The scope solely discusses the expansion of Dubai’s real estate market in the next years based on the location’s supply-demand ratios.
Dubai has been placed third among the top three destinations in the world to live, including vacation properties, according to research and readings. According to market figures, 10% of the affluent population moves to Dubai each year. As a result of the loosened rules, Dubai has broadened its investment pool and is now welcoming a variety of organizations and communities. Who wouldn’t want to be a part of Dubai, with the stunning houses and infrastructure that it offers?
Dubai is one of the cities in the real estate industry that provides the most creative and luxurious infrastructure to the community. The sales of residential homes and all other property types have increased since the global outbreak of the Coronavirus. However, during the second wave of COVID-19, Dubai not only draws a large number of tourists and visitors but also a large number of immigrants from diverse locations. With rising demand for Dubai’s real estate and people’s desire to purchase luxury properties, the market’s trajectory is unquestionably upward and would only result in favorable consequences for the Dubai real estate market.
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