Top events that have already influenced and may affect the real estate market in Dubai

The current and previous year had a tangible impact on the life quality of people around the world. The pandemic has changed the usual way of life and affected the state of the economy. UAE real estate market is no exception. The current situation has particularly affected the largest metropolis of the country – Dubai. Let's try to figure out what events had a direct impact on the decrease in sales, how the real estate market is getting out of the crisis and what awaits it next.

Content:

• Tourism sector collapse
• Technology development
• Needs for social distance
• UAE government programs
• Changes in the visa requirements
• Benefits for registration of foreign companies
• What events are linked with the state of the sales and rental market in Dubai in the future
• Summary

Tourism sector collapse

Traditionally, the second most popular metropolis after the capital attracted several tens of millions of tourists a year. Some of the tourists, imbued with the pace of local life, decided to buy a house and got ready for permanent residence. Investments in flats and apartments in Dubai were attractive. Since the closure of the borders, the rental market has crashed. The missing demand has led to a decrease in rental prices. Despite the fact that the lockdown did not affect UAE as tough as other countries, problems with international air traffic and lack of confidence in the future did its work. The entry of foreigners was closed in 2020 for a short period of time, during which sales decreased, and landlords switched to long-term rentals.

At the moment, the situation has changed. Both tours and apartments for rent in Dubai are in demand again. Due to the influx of foreign citizens, sales also increased.

Technology development

In an attempt to stabilize the economy and attract investors, the authorities have introduced a permit for remote transactions. The increase in consumer demand for flats and apartments in Dubai was facilitated by:

• Adoption to the system of 3D tours by real estate agencies, during which a potential buyer can evaluate all the features of real estate visually.
• Simplification of the registration procedure so that you do not need to leave your country to buy property in United Arab Emirates.
• Active use of remote property management. This made it possible to support investors, since all the concerns of looking after the property and renting it out was taken over by agencies and management companies.

Despite the fact that most buyers still want to visit Dubai before buying an apartment or a house, a growing number of customers are satisfied with online transactions.

Needs for social distance

Due to the specificities of housing in conditions of restricted movement, potential buyers have revised their popular ideas about real estate. If before the start of the pandemic, apartments in the central subcommunities of the city were in high demand, then in 2021, sales growth affected detached development projects. In the second half of the year, this trend was clearly confirmed by the jump in villa sales, which exceeded the results of previous years by two times. People prefer to buy townhouses, cottages and villas with their own land plot, where you cannot so clearly feel the restrictions imposed by the authorities. Suburban areas are actively in demand, especially if it has access to the coast line or if it is located not far from it.

Talking about flats and apartments in residential projects, analysts note the special attention of buyers to the following points:

• Spacious and panoramic windows.
• Spacious rooms, where you can make space for an office.
• Infrastructure of the residential project. Sport halls, swimming pools and retail outlets are important.

People realized that it is possible to work from home, but this process should be comfortable both for you and your family members.

UAE government programs

The government tries to stimulate the economy development by different ways, including:

• A long-term development plan for Dubai, according to which the population should increase to 5 million people due to the influx of foreigners. For this purpose, well-paid positions are being introduced in various fields. The growth of the population will generate the property need.
• Revision of the system of obtaining citizenship. In January 2021, the changes were announced in the legislation under which expats can become UAE citizens if they belong to a number of professions. This applies to scientists, doctors with a scientific degree and creative individuals. Thus, the authorities are trying to attract people who can have a direct impact on the development of the entire country in general and Dubai in particular. Benefits apply not only to talented personnel, but also to their family members.

Changes in the visa requirements

This is another major cluster of UAE innovative programs. In 2020, a decision was made on the possibility of obtaining a residence permit for 10 years on the so-called golden visa. A prerequisite for participation was the ownership of high-value property and special achievements.

• The offer for retirees is also interesting. They can get a residence permit for a period of 5 years if they have retirement benefits, bank deposits and property worth from 2,000,000 dirhams. This solution is focused primarily on investors who have reached retirement age and already own real estate in UAE.
• Similar changes have affected the business sector. Now entrepreneurs can get a residence visa for 5 years, which will create favorable conditions for investing and doing business. To do this, the business value must be at least 500,000 dirhams.

Benefits for registration of foreign companies

Since June 2021, the changes have been made to the legislation. Now the participation of local citizens is not required for the company registration in the country. Prior to this, a prerequisite was the entry into the board of directors of UAE citizen, who should have owned at least 51% of the shares. This makes it easier to conduct business outside of free trade zones. This way supports the economy development, attracts expats and has a direct impact on the state of the real estate market.

What events are linked with the state of the sales and rental market in Dubai in the future

The main one is Expo 2020. The event was planned in Dubai for a long time. It gave a boost for the development of the city's infrastructure and new residential and commercial projects. Due to the global pandemic, the opening of the exhibition was postponed to the fall of 2021.

What to expect

It is expected that the exhibition will attract not only at least 25 million visitors, but will also contribute to the increasing employment for the staff involved in its service. The state predicts in advance the probability of speculation in prices with rented property, so it announced the freezing of rentals. There is no doubt that the event will serve as a powerful impetus to the economy and real estate sector development:

• After the exhibition, the properties rented for the exhibition will be actively used. It will cause a massive influx of tourists.
• Additional investments into the economy will contribute to its stabilization and further development. The higher the quality of life in the area, the more people who want to move to it from other countries.

One of the most popular areas of Dubai will be District 2020. It contains more than 80% of the units built for the exhibition. Here you can find both elite and affordable real estate.

Dubai International Boat Show

Another interesting event is Dubai International Boat Show. It will be held in March 2022. Of course, it is difficult to compare this event with Expo 2020 in scale, but it can also have an impact on the real estate market in the amount of raised capital. The event has the status of a world event and arouses the interest of foreign investors in the market. Perhaps, it can touch luxury real estate.

Summary

The pandemic and its echoes had the most active impact on the state of the residential market in Dubai:

• The border closures in 2020 led to a decrease in tourist flow and a drop in demand for real estate.
• Limited mobility has led to an increase in the popularity of villas and detached houses.
• In the future, the most striking event in Dubai will be Expo 2020. It will attract potential investors around the world.

Since the end of 2020, there has been an increase in demand for housing units and prices. It is not sharp, but this phenomenon is observed for the first time since the beginning of the global economic crisis.

General market prospects

Sales growth in the first half of 2021 exceeded the same period last year by almost a third. Analysts say that this situation will be observed in the second half of the year. So far, prices have increased by 2-4%, depending on the specific housing unit and the area of its location. It is most likely that in 2022 the trend towards price growth will also remain relevant. Apartments and houses may rise in price by another 1.8-3%.

To sum up, we draw the attention of potential investors to the fact that it is more profitable to invest money in property right now. So far, there are a sufficient number of proposals on the market for any budget and price increase has not greatly affected it. You can get acquainted with the current ads for the real estate sales from real estate agencies and local real estate developers in our catalog.