What types of real estate in the COVID era turned out to be the most attractive in Dubai

Dubai has successfully survived the pandemic, as evidenced by the increasing demand for residential and commercial real estate. However, the epidemic has had a significant impact not only on the pricing policy, but also on the preferences of buyers. We will analyze the current situation in the real estate market and deal with the future prospects.

Content:

• How the pandemic affected sales in Dubai
• What is happening in the real estate market now
• Which properties are the most popular
• Ready-built real estate is more in demand
• In which areas of Dubai is real estate purchased most actively
• In which areas do people buy real estate as an investment
  • What are the reasons to invest in real estate in Dubai
• What are the future forecasts for the Arab real estate market
  • Additional incentives for further development
  • The possibility to buy a residential remotely
• Professional assistance in buying property in Dubai

How the pandemic affected sales in Dubai

The decrease in demand began to be observed in 2019, but the real estate market felt the most pronounced impact of the lockdown in early 2020. Moreover, Dubai did not close its borders as radically as other states. However, the international traffic lifting affected the arrival of investors. The state began to look for ways out of this situation, stimulating the economy development. Online transactions have become relevant. What’s more, a lot of real estate developers have introduced a system of benefit payments that allow deferred payment, including for several years after the end of construction works.

As the restrictions on the Dubai real estate market were lifted, a revival began. It was greatly influenced by the remote transactions. Sales were affected by a decrease in mortgage rates. The active growth began in the last quarter of 2020 and continues to present days. Increased prices began to increase the demand.

What is happening in the real estate market now

It makes no sense to associate the price decrease only with the pandemic. The decrease has been observed since the beginning of the global economic crisis, which was preceded by a sharp rise. Against this background, the decrease observed since 2014 can hardly be considered a collapse of prices. Therefore, it is much more logical to associate the revival of consumer interest not only with the fact that the state is successfully fighting the coronavirus through vaccination, but also with the economic revitalization. The authorities are actively working in this direction, applying a wide range of measures, including:

• Special programs to attract high potential staff (a residence permit for 10 years) and increasing employment.
• Stimulating the business sector by simplifying company registration schemes. If earlier a citizen of UAE was supposed to participate in the shareholders, then the authorities announced the rejection of this measure with the introduction of amendments to the legislation.
• Increased attention to foreign investment. Foreign real estate is allowed to be purchased with a mortgage.

Which properties are the most popular

In 2021, buyers preferred villas and detached townhouses to previously more popular apartments or apartments in residential complexes. COVID-19 has prompted people to keep a distance from their neighbors, which is the easiest thing to do while living in an area closed from outsiders.

Buyers value private swimming pools, green areas and even a terrace. Therefore, the demand for isolated penthouses with panoramic windows and access to an open area is higher than for cozy studio-apartments with small windows. The increased demand for such housing units has also affected the rentals.

Ready-built real estate is more in demand

Despite the fact that off-plan property developments that provide for remote living give an opportunity to save money. A growing number of buyers are choosing ready-built real estate. Off-plan property development is chosen by those who are planning investments without permanent residence. The explanation is simple. If we talk about comfortable residential complexes, then it has everything you need for life:

• Swimming pools.
• Sport halls.
• Walking areas.
• Playgrounds.

Retail outlets are provided in large residential projects. Due to this, when forced isolation occurs, which was acutely felt around the world during the lockdown period, the owners of such properties do not feel a sharp restriction of their own rights to free movement, nor do they face a decrease in the quality of life.

In which areas of Dubai is real estate purchased most actively

Communities with developed infrastructure are in demand. These are the areas that usually attract the largest number of tourists or the community. There are lots of villas or townhouses on the territory of such areas. The territorial distribution of demand can be divided into the following areas:

• Dubai Marina. In total, purchases in the first two quarters here reached almost 3,000,500,000 dirhams.The area has free access to the coast line, which allows you to use well-groomed beaches.
• Downtown Dubai. Real estate was sold here for 2,000,490,000 dirhams. The business activity of the area is not inferior to its developed infrastructure. The development project is modern. You can buy both apartments with several bedrooms and spacious penthouses in skyscrapers.
• Dubailand. The community ranks third in terms of the number of transactions.

Those who want to buy a villa are actively viewing the Arabian Ranches area. It includes three gated communities with spacious houses and a surrounding territory. The starting price of the villas is 2,000,000 dirhams. There are also a large number of villas in Dubai.

In which areas do people buy real estate as an investment

The quarters with the best investment returns include the Jumeirah Lake Towers. Its annualized rental income is 6.5%. Springs is in second place. The return on buy-to-let properties is 6%. The figures for the community dominated by villas are slightly lower. These are the areas of Arabian Ranches, Jumeirah Park and Dubiland. The rental income varies from property to property and ranges from 4.9 to 5.5%.

What are the reasons to invest in real estate in Dubai

The dynamic economy of the metropolis is only one of the reasons. Despite the fact that the successful development of United Arab Emirates is often associated with oil, that’s not entirely true. Oil fields have become an impetus for development, but now the economy is still dynamic due to tourism and business activities, which are facilitated by soft terms in free trade zones. Other reasons include:

• ROI. The demand for real estate is not decreasing. Due to the prospective employment opportunities and few development projects, it will only grow.
• Liquidity. While making such a decision, apartments can always be sold without the financial loss due to forex volatility. The dirham exchange rate against the US dollar is stable and it does not change.
• Attractive prices. If you compare the cost per square meter in Dubai and New-York, you can see that in UAE for a similar amount you can buy a much more comfortable and spacious option.

The tax system is also attractive. No taxes are required for the property ownership or disposal. It allows you to make a pure profit.

What are the future forecasts for the Arab real estate market

Despite the fact that it is premature to talk about the end of the global pandemic, analysts have already recorded a price increase, which is 1.5-3%. The forecasts are expected to focus on the comfort of real estate, as well as a further price increase due to the reduction in the number of development projects. The central metropolis areas do not allow it to be conducted due to the limited territory. Suburban sub-communities will grow, but it will take time to build a comfortable infrastructure.

Due to the current situation, it is possible to predict:

Increased demand due to supply reduction.

The demand for villas and townhouses for permanent residence, as well as compact apartments for rent, is relevant in well-equipped residential projects.

Additional incentives for further development

The government wants to attract investors through various activities. One of the largest among it should be Expo 2020, which was postponed due to the pandemic. According to the forecasts, at least 20 million people will visit this event. It should contribute to the growing demand for both short-term and long-term buy-to-rent properties. At this time, it is difficult to predict how many people this event stimulates to stay in the area and rent or purchase real estate, but there is no doubt that the exhibition will have a direct impact on the real estate market. During the exhibition, there is a high probability of growing demand for real estate in the following areas:

• Dubai Investment Park, which has a commercial orientation. The community is characterized by affordable prices, while you can find both luxury properties and tourist apartments.
• Jumeirah Golf Estate is an area with elite properties, which usually attracts valuers of enhanced comfort.
• Al Furjan is an area, where the popular villas and townhouses are located.

The possibility to buy a residential remotely

This is another catalytic measure that allows you to use advanced technologies without visiting the country. This format is especially convenient for those who are planning investments. By choosing remote property management, you can earn income without changing your place of residence.

Professional assistance in buying property in Dubai

Emirates specialists. Estate controls the situation in the Dubai real estate market from the inside. It is ready to help with the choice of real estate, as well as the purchase registration. You can find current proposals in the real estate catalog right now.