A bright and welcoming future for real estate in the United Arab Emirates – News

The Expo 2020 effect continues to push the attractiveness of properties for foreign investors

Published: Wed, May 25, 2022, 7:28 PM

The UAE real estate market continues to offer several exciting opportunities, especially for international investors who have arrived in the country for the first time for the Expo 2020 Dubai mega event, real estate experts have said.

Speaking to Khaleej Times, Emad Haq, Vice President of H&S Real Estate, highlighted the “ripple effect” the global mega event had created in firmly placing the city, and by extension the UAE, on The map of the world.

“What we already knew, but the whole world now knows, is that the UAE, and Dubai in particular, can host major events globally,” he said. “The United Arab Emirates has shown the world that it is currently in a position where it can even host the Olympics. This is the vision that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates states and ruler of Dubai, saw when the real estate boom happened in 2005-2006.

Haq also noted that many visitors were not only here for Expo 2020 Dubai, but were also keen to explore business and investment opportunities. “We’ve seen active investors from areas we’ve hardly ever seen before. They came from places like Austria, Hungary, Colombia, Argentina, Mexico, etc. They came to visit the Expo and during their visit they actually thought it was a great place to invest, and they ended up buying properties here – such was the confidence they had in Dubai – and, at the same time, many people have thought about setting up businesses here.

Haq further noted how impressive it was that Dubai welcomed around 24.1 million visitors for Expo 2020, especially at a time when many countries were still unsure of the Covid-19 situation. . “Let’s say you have 24 million people and one percent of those visitors decide to stay and move here. Even this 1% will add a lot, as far as the Dubai market is concerned. »

First buyer preferences

According to Haq, the new visitors, who were looking to buy, invested in properties from internationally well-known developers such as Emaar, Nakheel, Damac and Dubai Holding. “However, that does not mean that they only went for these developers. Investments were at all levels and in all categories. However, appreciation and demand were highest for luxury properties It was an anomaly that surprised us a bit as real estate agents.

“Overall, if you look at prices in Dubai, we have seen a jump of 40 to 60%. In the luxury segment, it has increased almost 2 or even 2.5 times,” he said. explained “I want to emphasize that the investors who came were not speculators; they are not people who want to return for a quick profit after a while. There is a speculative market, which is not a stable market, and then there are those who are end-buyers with deep pockets.These are the buyers we’ve seen here.

Dubai, he added, has always been seen as a destination where your investment was safe, and which promised you a good rental return. “It’s one of the only places in the world where you get a rental yield of between 4.5 and 9%. Whereas on a good day elsewhere in the world you’ll get 3.5 to 4%. Your money is safe, it is pegged to the dollar, so you know there is no currency fluctuation.

A very attractive buyer’s market

Like Haq, Farooq Syed, CEO of Springfield Properties, believes that expertly handling the challenges of the pandemic has set Dubai apart from other global destinations. “The fact that Dubai hosted such an event at a time when most of the world was still recovering from the aftermath of Covid-19 really showed this city’s commitment to overcoming all challenges, and its passion for growth and With most global events canceled, Dubai recorded 24 million visitors to its Expo pavilions, showing flexibility and cementing its leadership position in the global community.

“Additionally, the booming real estate market attracted investment from many Expo visitors, and we at Springfield had seen many first-time buyers buying investment properties in Dubai,” he added. .

The Dubai market, he noted, still holds many opportunities. “I believe that with management’s plans for future business and industry growth, we will attract more people to make Dubai their home. With this increase in population, I expect further growth of housing demand in the coming years, bringing healthy returns to investors.

Compared to major metropolitan cities around the world, real estate in Dubai is still vastly undervalued, Syed believes. “One of the reasons is the lower cost of labor and building materials. However, costs are rising worldwide and developers in Dubai will not be able to offer the same prices in the future, which will increase the cost of replacing properties. With this, and the expected increase in population, I am fully convinced that real estate prices will rise in the next few years.

The post-Expo 2020 boom is here to stay

Imran Farooq, CEO of Samana Developers, revealed that real estate appreciation in Dubai hit an all-time high of 300% in the lead up to Expo. On the other hand, rental values ​​in all areas of Class A properties had shown 100% appreciation.

Citing research from the Dubai Chamber, he said Expo 2020 helped more than 76% of businesses in Dubai boost their growth in the six months of the event. The Ministry of Economy and Tourism reported that a total of 136,034 business registrations and licensing transactions were concluded in the first quarter of 2022, up 36% from the period of the previous year at the start of the Expo.

“Given these positive factors, the post-Expo boom is here to stay and the outlook is bright,” Farooq said. “More than 24 million visitors to Expo 2020 learned that Dubai offers one of the best lifestyles in the world, with state-of-the-art infrastructure, modern architecture and tourist attractions. Additionally, the UAE’s business-friendly visa regime has encouraged new businesses, especially the professional and work-from-home categories. »

He added: “With a very bullish trend in residential properties and the ease of doing business, market indicators are showing better prospects, which has great potential to continue to take into account long-term development plans. from Dubai. I expect the market to grow year over year in terms of capital growth, real estate FDI and rental income.

He also highlighted the demand for real estate investments in both the buyer and rental segments. “These real estate transactions are here to stay, because end users have bought these properties – it means a long stay in Dubai. We have seen that the demand for vacant housing is greater than that for rented housing. We are seeing market appreciation not just in Class A properties, but across many segments – even Class C areas have seen rent appreciation.

Not a speculators market

Haq is quick to assure investors that fluctuations are normal in all markets. “In Dubai, the swings can be big, but the chart has always been trending up. No one who has invested in the past seven years has ever said they lost money. The security you see in Dubai in the real estate market really doesn’t exist anywhere else. In a nutshell, this is a very attractive buyer’s market.

In the long run, he expects to see a few cash-strapped people doing distress selling. “But, we will only see a market drop if speculators come looking for a quick buck. Dubai’s handling of the Covid-19 pandemic has put the city on the global map, and proof of that is when we saw 2021 record the highest number of open deals.

“People realized it was a safe place to invest, and real end buyers came in,” he explained. “Today you don’t have a lot of HNWI investors coming in for one or two units; you have people saying they want entire floors. Although we have big uptrends, we can expect to see price stabilization going forward. The only thing we have to worry about is people coming in, paying the deposit, and two weeks later going out on the market hoping to sell for more.

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