For the past few years, Dubai, and by extension, United Arab Emirates (UAE), has been a safe heaven for foreign investors and FDI.
The ease of doing business in this country makes it more appealing to many high-net-worth individuals worldwide to put their trust and money in the market.
Dubai (UAE) has lived up to investors’ expectations for many years and will continue to do in the years to come.
Numbers show that the Dubai property market will set new records in H2, 2022, and H1, 2023.
The UAE was among the first nations to successfully tackle the global pandemic and reopen their markets for foreign investments.
Whereas the real estate markets of the UK and the USA are hitting rock bottom, with the UK’s property demand sliding 44% this year.
To better understand, let’s divide Dubai’s real estate/property market’s past (2021), current (2022), and future (2023) performance. Let’s begin.
Dubai Real Estate Market Forecast 2021:
Several factors play a huge role in the high demand for Dubai’s real estate, such as UAE’s quality of life, safety, and high ROIs.
At the end of 2020, UAE was among the first countries to ease COVID-19 restrictions, open their international borders, and reinvite investors to the country.
Contrary to what many experts anticipated, the results were astonishing. It is estimated that over 52,400 investors bought or invested in around 73,000+ properties nationwide.
The transaction was valued at around $81.67 billion or around 300 billion UAE Dirhams in 2021. This was around 65% more than property transactions in 2020.
With the increase in demand, the property value skyrocketed to around 70% more than last year, according to Dubai Land Department (DLD).
Interestingly, after these promising results, many experts said that the COVID-19 pandemic played a positive role in Dubai’s real estate market, and the way it looked, the experts were right.
The UAE government handled the pandemic situation admirably. This is why most developed countries worldwide are still seeing a decline in demand, while the opposite is happening in UAE.
In the country, the areas that saw the most investments offered the most to their investors, such as high living standards and great lifestyles. Palm Jumeirah, JVC, and Emirates Hills topped the list.
However, the Dubai Marina dwarfed all the others this time, with an investment of around $7.78 billion or 28.6 billion UAE Dirhams.
Dubai Real Estate Market Forecast 2022:
After successfully completing 2021, Dubai’s real estate market continued an upward trend at a rapid growth rate by following the same rules.
This time, the market performed even better than last year. Compared to 2020, the market saw a rise of more than 85% in 2022, acing foreign investments of $48.18 billion (177 billion Dirhams) in H1, 2022.
Housing and property prices are still rising, and it’s becoming easier for owners to sell their properties at a good rate and get a good ROI (Return On Investment).
Experts believe that the prices will keep on rising in H2 2022 as well, and the FDI influx is setting new records in the UAE, and statistically, this will continue in the coming years.
After taking a detailed look, professionals have finalized some factors which they believe are the secrets to the success of the UAE.
These are supply and demand, foreign investors’ interest rates, and low bank loan rates. The competition in the expensive areas of the country is tough.
Many high-net-worth individuals and investors are currently engaged in a bidding war for lavish villas and other esteemed properties.
As mentioned above, ease of doing business and government policies to ease the immigration process makes the country more appealing to wealthy immigrants.
That’s why more than 70% of Dubai’s population are immigrants due to plenty of job opportunities. There is just so much that you can do in Dubai (UAE).
FACT: According to the passport index, UAE’s passport is the strongest in the world as of 2022, beating Germany, Japan, and Singapore.
Dubai Villas Are Leading The Game:
Specifically, among all other properties, Dubai and the UAE villas have been the most in-demand properties in the nation for the past few years.
And unsurprisingly, villa prices are skyrocketing because of high demand. The villa market is the toughest currently.
Interestingly, the villa demand has surpassed apartment demand in the UAE, and because of the short supply, the villa real estate market is getting tougher every day.
However, a fresh villas supply is soon expected to meet the demands. Until then, this bidding war isn’t ending anytime soon.
Villas in prominent areas like Palm Jumeirah and JVC are the top ones in the game, and investors are willing to go to any length to acquire these properties.
Experts believe that this demand for villas is going to decline anytime soon. Instead, it will increase as bigger sharks enter the tank.
Rising Interest Rates:
Interest rates are also rising in the UAE. The consequences of an increase in interest rates are yet to be seen.
Experts say that whatever impact the rising interest rates may have on the market, it won’t stop growing. The prices will go up, as will the cost of living in the country, which will benefit some and exasperate some.
However, whatever the consequences may be, it is expected that UAE’s GDP will increase at a rate of 2.5%, and the nation will also see an increase in its population.
In simpler words, Dubai’s real estate market will continue the positive upward trend, which is the best investment time.
Dubai’s Real Estate Market Forecast 2023:
You can have high expectations from the real estate market for H1 2023. To put things in perspective, let’s look at the H1 and H2 in 2022.
At the beginning of H1 2022, around $700 million in transactions took place. In just one day! And by the end of the first week, these numbers increased significantly to around $2 billion.
As you can see, the numbers in the first week of H1 2022 were appealing enough. Palm Jumeirah was the hub of these high-value transactions at around $140 million.
The second on this list was Dubai Marina, which saw an investment influx of around $135 million. Business Bay Area and Jebel Ali First Area also hosted many transactions.
The investment influx in 2022 was better than in 2021, and with experts’ growth predictions, it will be even better in H1 2023.
In the end, the numbers are quite promising, and now is the best investment time in Dubai’s real estate market, as it’s expected to grow even more in H1 2023.
The UAE government is constantly trying to make immigration as easy and smooth as possible to bring FDI into the country.
With increasing prices, the cost of living will also increase. This will make the UAE one of the most expensive countries in the world.
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