Real estate in the UAE: how to save and increase savings during the COVID-19 pandemic

The after-effects of the pandemic have affected real estate market in Dubai and the UAE in general. The country’s economy has deteriorated significantly because of closed borders, fewer tourists and the population’s lower spending power. Almost the whole world has faced these issues but the Emirates government’s decisions have become a model for many countries in solving these problems. In this article, we’ll look at how the UAE coped with the pandemic, if it’s worth buying real estate there in 2022, and how to save money after investing.

Contents:

• Is it worth buying UAE real estate in 2022?
• How has the pandemic affected the UAE real estate market?
• What’s happening now in the real estate market in the UAE?
• What’s going to happen in the UAE real estate market after the pandemic?
• Can you transact remotely?
• Can you get citizenship and a residence permit online?
• We’ll help you choose real estate in the UAE

Is it worth buying UAE real estate in 2022?

The real estate market in the UAE started the year successfully with 5,797 purchase and sale transactions worth 36,690,000,000 dirhams registered in January. Experts believe that in 2022, the cost of housing in the Emirates will continue growing but at a slower pace than in 2021. According to forecasts, 38,500 apartments and 3,800 villas will be sold.

These forecasts of the local real estate market in Durban is expected to see:

• 30,000 transactions of apartments in Dubai;
• 3,500 transactions of villas in Dubai.

Experts suggest that, like last year, some of these deals will be delayed until next year.

In Abu Dhabi, about 2,000 residential units will be sold on Al Rim Island, 4,000 on Al Raha Beach and Yas Island and 1,200 on Saadiyat Island. It’s expected that in 2022, several new projects will start in the UAE capital. Old construction that was stopped previously will also resume.

The UAE will continue striving to be at the top of the global real estate market thanks to its unique combination of low prices per square meter, high rental yields, fast capital gains and flexible investment options. Even if there is a new global crisis, the Emirates market will remain relatively stable.

Real estate prices in Dubai and the UAE are expected to rise shortly because of the limited market supply. Because of this, local and foreign investors are eager to quickly acquire property.

How has the pandemic affected the UAE real estate market?

These types of properties were hit the hardest by the pandemic:

1. Offices. The pandemic greatly reduced the demand for office space. The massive switch to remote work was a shock for this sector. The office environment has become less central, technologically advanced and reimagined.
2. Houses. The pandemic has led to the need to have all the most important infrastructure in individual residential areas and suburbs. At the design stage already, projects are undergoing transformations and new technology is available in future-proof homes. People who buy apartments in new buildings are paying more attention to these technologies. Now, residential properties are chosen using remote VR tours and various parameters like transport accessibility and surrounding infrastructure can easily be figured out.
3. Hotels. Hotels suffered the most from the pandemic so it has also undergone the most radical changes. As one real estate expert put it, «hotels should become as unlike hotels as possible». This change means introducing the concept of «bleisure» or business + leisure.

What’s happening now in the UAE’s real estate market?

Many were skeptical about if the UAE real estate market could go back to the way it was after the outbreak of the pandemic. Offers were at an all-time high, a large number of people lost their jobs, and some tenants stopped paying on time. All this led to a 12% drop in rent and owners were worried about the market’s future.

After the quarantine ended in 2020, the world saw an unexpected surge in the UAE real estate market. The country’s government responded well and quickly to the fight against the pandemic by financing the healthcare industry and organizing a large-scale vaccination campaign. Because of this, in November 2021, the volume of real estate transactions increased to AED 135,400,000,000.

After almost 100% vaccination of the population, the UAE economy began to return to pre-pandemic levels. More tourists in the country and government programs encouraging visas and residence permits have brought more foreign investment. As the pandemic changed the global economy, new trends have come about in the Emirati real estate sector, that will continue in 2022:

1. End-user growth. Buying a house in the UAE has become easier as well as an attractive investment because of favorable mortgage rates, low property prices and rapid capital growth.
2. Demand for luxury housing grows. Quarantines and borders closing around the world forced many wealthy people to think about buying property in the UAE. Luxury real estate in Dubai has become especially popular as it offers unique urban infrastructure. In 2021, this trend was shown in the cost of villas increasing by 16.5%. In 2022, experts predict this demand for luxury housing and its increased prices will continue.
3. Environmental responsibility. Governments, corporations and individuals are more aware of their responsibility to the future of the planet. Buildings in cities account for almost 40% of global carbon emissions. Because of this, now all developers must make decisions based on sustainable development. The government must also change legislation and create incentives to achieve zero emissions in the UAE by 2050.

What awaits the UAE real estate market after the pandemic?

All of the above paints a picture of the future UAE real estate market. Sustainable development will be central for the next five years.

The UAE government will continue to make decisions to address climate change. These measures include how to achieve zero carbon emissions, increase energy efficiency and introduce renewable energy sources. Developers who’ll adapt to green construction standards faster with eco-friendly options at the most affordable price will win.

Villas and townhouses showed the greatest increase in value and demand but compared to 2020, there are also more apartment transactions. Both trends are expected to continue in the coming years.

The long-term plan of the UAE government is to improve the manufacturing sector. This will lead to a need for qualified middle-class workers and more jobs means more real estate demand.

Thanks to a visionary government, world-class infrastructure and a multicultural business environment, the UAE real estate market expects steady growth and an increase in the number of buyers locally and globally.

Can you transact remotely?

Buying and selling real estate in the UAE can be done remotely. To do this, the buyer needs to issue a power of attorney to their representative. This could be an employee of the agency they work with. The document must be stamped and signed by a notary.

Can you get citizenship and a residence permit remotely?

At the height of the pandemic, the UAE, like many other countries, suffered from decreased tourism income. The way out was developing immigration programs that simplified the residence permit and second citizenship registration.

In 2021, the Emirates government decided to give «golden visas» for the following groups of foreigners:

• IT-specialists;
• Humanitarian workers;
• Outstanding alumni;
• International talents.

The UAE also approved a work visa for remote workers for 1 year. It’s similar to the 2020 Dubai remote visa.

To get a residence permit and citizenship remotely, you can use the following resources:

• official website of «ICA Federal Authority for Identity & Citizenship»;
• official website of «General Directorate of Residency & Foreigners Affairs»;
• online portal «eChannels»;
• mobile application «ICA UAE eChannels»;
• mobile application «GDRFA Dubai app».

We’ll help you choose real estate in the UAE

Buying or selling real estate in the UAE can be difficult. But on the plus, potential buyers don’t need to go through a long trial and error process trying to navigate the local market. EMIRATES.ESTATE will deal with any of our clients’ worries - our competent specialists and innovative technologies will make this process seamless for you. Our agency's experts will do everything including:

• helping you choose the best property;
• organizing support in all transaction stages;
• advising on any issues of interest;
• providing high-quality after-sales service.