By Ghulam Haider
The real estate market is on the surge in the almost culminating third quarter of the current year in the UAE, which is forecast to maintain a similar rapid upward trend in the year 2023.
Many elements make the UAE the ultimate location for property investors. With an unbeatable economy and access to countless property investment opportunities, the UAE is a premier location for investors worldwide.
Dubai has registered itself as one of the top real estate hubs in the world where the investors are flocking to buy a stake in different real estate properties from across the globe.
Prime residential values in Dubai continue to strengthen, growing by 29 percent in the third quarter alone, fueled by a persistent deluge of ultra-high net worth individuals who are zeroing in on Dubai’s premier districts in search of second homes.
The global city of Dubai is home to over 200 nationalities, making it the top choice to live and work for many. With such a diverse group of people, it attracts top talent across multiple sectors.
Over the last 12 months, Dubai’s prime real estate prices are up 89 percent, according to a report in Bloomberg. And in popular neighborhoods like Palm Jumeirah, Jumeirah Bay and Emirates Hills, those figures have increased more than 100 percent as wealthy buyers have lined up to secure property across the city’s new hotel developments.
For example, the purchase of a villa in Palm Jumeirah sold for a record $82 million back in July. According to Arabian Business, the city’s real estate receipts exceeded $325 million over two days in September, with 386 sales—341 of which were apartment condos and villa purchases at luxe gated communities across the city.
This activity comes on the heels of a hot 2021 for the city, which saw $35 billion in property transactions, the biggest year since the 2008 financial crisis, according to a report by CNBC.
While many of the new buyers come from countries like Switzerland, Germany and France—wealthy Russians have been flocking to Dubai to park their assets. Unlike many Western nations that have sanctioned Russians for their country’s invasion of Ukraine, the UAE hasn’t imposed such measures. Dubai was already a destination for Russians, but now it’s one of the few safe havens to prevent seizure of assets so much so that the country has become a yacht sanctuary for oligarchs.
But some also say the boom may be over soon as a possible housing bust is looming. According to a Reuters poll, home prices in Dubai were forecast to slow down by 6.5 percent in 2022 and 3 percent in 2023. However, others say the market doesn’t show too many signs of slowing down anytime soon.
Dubai rents witness a 27% jump in 2022
The Dubai rental market continues its boost as the average rent witnesses a jump of 27 per cent this year, with the demand also getting a major boost in line with strong economic activity in the emirate.
The average apartment rental prices have reached AED 91,795 AED, while the rent of villas has jumped to AED 274,740. This shows an increase of 27.5 per cent and 25.7 per cent in both the respective sectors, according to a survey.
However, due to the rising prices, renters are reluctant to move to a new home. This is why there’s a decline in the number of new contracts, and hence, renewals are higher. The rental property market is expected to conclude the year on a strong note.
Real estate experts say that the Dubai rental market is cruising. Prime areas such as Palm Jumeirah, Downtown Dubai, Dubai Marina and JBR are performing exceptionally well, which is a great positive sign for the market. The year 2022 will end on a very strong note as FIFA World Cup 2022 Qatar is giving the short-term rental market a remarkable boost.
Popular areas in demand
Maintaining its reputation, Palm Jumeirah continues to be the most in-demand area for rental properties in Dubai. In Q3 data, the average rent for apartments in Palm Jumeirah rose by 22 per cent. Similarly, the villa segment in the community also showed a jump of around 32 per cent.
Besides, Downtown Dubai recorded a major increase of 24 per cent in terms of average rental prices of apartments while Dubai Hills Estate recorded the highest increase of 33 per cent for rental villas.
JBR, Dubai Marina, Al Barari, Emirates Hills and Jumeirah Bay are among other areas that have witnessed an increase in demand for rental properties.
Outlook for 2023
The outlook for Dubai rental market in 2023 looks positive. The rent for apartments and villas in Dubai will continue to remain elevated during the next year, paving the way for an even stronger 2023.
Dubai property market is attracting HNWIs and foreign investors due to higher returns and stability, which will impact the rental market as well. Despite the increase in rents, people will continue to relocate to Dubai, enjoy its upscale lifestyle and explore professional & entrepreneurial opportunities, which, ultimately, will benefit the overall economy.
Attractive elements
With its warm climate and pristine beaches, Dubai is a dream destination for many investors looking for a place of luxury and relaxation. Dubai also attracts investors because it’s an ideal location to establish a business base due to its strategic location and access to global markets. Dubai offers a variety of tax-free investment opportunities in prime locations including ready to move or new construction options.
Golden visas for investors
UAE’s golden visa system offers long-term residency for individuals. On October 3, 2022, new eligibility rules for the golden visa came into effect for property investors buying property worth at least 2 million AED. Investors are also eligible if they purchase the property on loan from a bank or invest in an off-plan property directly from the developer.
Benefits of buying property in UAE
Buying property in the UAE is attractive to people across the globe for multiple reasons, including;
Tax-free
There’s no collection of annual property taxes, income gain taxes and no inheritance tax for property owners in the UAE.
Location
The UAE’s central location makes it accessible to international investors worldwide. With direct airport links from almost anywhere in the world, investors from around the globe can access the UAE.
Unmatched value
Compared to other top global real estate cities, Dubai’s real estate market offers unmatched value in top locations across the city.
Open market
The UAE’s real estate market is open and accessible to anyone in the world. With its streamlined process, buying property is secure and simple and can be completed both inside or outside the UAE.
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