A new boom is sweeping the Dubai real estate market, with prices predicted to grow steadily over the next two years. Emaar Properties and Al-Nakheel are two companies that have recently received huge contracts for the construction of major shopping malls. They claim that the mall they will build will be the largest in the world. Despite the recent boom, the future of Dubai’s real estate market remains uncertain.
Dubai’s real estate sector is experiencing an unexpected boom
A surge in new projects is driving demand in the Dubai real estate market. While oil prices remain low, governments have invested to support the economy in anticipation of an economic recovery. The country is preparing for the upcoming Expo 2020, which is expected to bring record tourism and employment to the area. This growth in demand is causing the over-supply of housing stock to be quickly absorbed. If this over-supply is not addressed, prices will rise.
The city’s high-end real estate market has seen an unprecedented surge of foreign buyers. They’re coming to Dubai to shop and dine, and they’re snapping up luxury properties by the dozen, sending prices skyrocketing. Sales of these properties jumped 230 per cent in the first quarter of 2021, and prices in some of the city’s prestigious areas jumped by 40 percent.
Constant Increase in Prices
As the UAE economy continues to recover, the demand for real estate in the region has grown substantially. In May of this year, the prices of properties in Dubai and its surrounding areas rose by 0.69%, compared to a 0.14% rise in April. Most buyers are GCC nationals, with Asian and Iranian buyers making up the rest. According to global real estate consulting firm Global Realty Partners, the demand for off-plan properties will rise by 74% over the next two years.
Several factors are responsible for the increase in rental rates. For instance, the average annual rent for a one-bedroom apartment in the DIFC is AED 73,000, compared to AED 143,000 for a three-bedroom apartment. Rental rates in Downtown Dubai, where the iconic Burj Khalifa is located, average AED 68,000 per year.
Among all major developers in Dubai, Emaar has emerged as the largest company. It has handed over 81,600 residential units in the city since 2002. The company has developed robust project execution capabilities, and currently has more than 24,500 residential units under development in Dubai and the world. The company’s recent launches include The Valley, which is aimed at mid-income families. It has also launched similar projects in India, Egypt, Lebanon, and other emerging markets.
In the third quarter of this year, Emaar Properties has reported a profit of Dh1.3 billion, an increase of 25 percent from the same period last year. The company’s revenue also increased, with sales of commercial units, land, and hospitality businesses rising by 51%. In addition, the country’s welcoming attitude to wealthy foreigners has also spurred demand for luxury homes.
The real estate sector in Dubai is flourishing day by days. Nakheel, a leading real estate company, has pumped $4 billion into the local economy since 2010. Despite the recent layoffs, the company is one of the few real estate companies that has a proven track record of success.
The real estate sector is vital to the emirate, from the government to its residents. The recent Land department initiatives to register all built property have restored investor confidence. Despite these recent initiatives, the real estate sector in Dubai is still far from achieving full potential.
There are various developments in the Jumeirah real estate sector that are contributing to the city’s development. A few of the developments include the Palms Island, the Dubai Waterfront, and Jumeirah Lake Towers. In addition, the government has committed to invest $ 9.5 billion in Dubai World, which has changed the image of the emirate as a business and tourist destination.
The fast adoption of COVID-19 vaccinations in the UAE has boosted the city’s response to the outbreak. As a result, Dubai is the only major global metropolis with no COVID-19 restrictions until 2021.
With the high number of tourists, it is possible to obtain the maximum amount of income from your investment. The emirate also has numerous investment areas that are economically advantageous. As a result, you can find businesses from all segments of the economy converging here.
While short-term gains are possible in some sectors, long-term growth requires political stability and investor confidence in the region. The chief economist of the Dubai International Financial Centre Nasser Saidi says that this situation is particularly important for the region because much of North Africa is in turmoil and changing rapidly. As a result, businesses serving the region are looking to the city for a stable economy and an open culture.