Dubai is still a relatively new market with a large amount of land still to be developed, giving the opportunity for Investors to see growth in property value from the launch to the completion.
The last 15 months has seen the property prices rise across the Emirate due to the high demand from residents wanting to own and investors seeing Dubai as the safest and best place to invest for price per sq. ft.
The future of the market is constantly being discussed with Buyers and Sellers, especially with the new turn of events in Russia. We are yet to see a large change but foresee the confidence in the Dubai market sustainable with demand, the potential threats will be in financing and interest rates in the future but this will lead to a surge of cash purchases due to Investors want to remove money from banks and into brick and mortar.
Lifestyle seems to be the largest appeal for investment into Dubai, giving just one of many examples, we just closed on a AED24.5 million villa in Dubai Hills to a European family looking for a home to split their time between London and Dubai. Residents in the region are still buying properties, creating more of a ‘end user’ market in secondary sales, along side projects close to completion.
Developer’s such as Damac, Emaar and Nakheel are releasing projects that are tailor made to the new requirement’s of the buyers, with amazing villa communities in Lagoons for the end user and investor seeking a community with ample facilities to the Beachfront which will cater for investors looking to lease on short term (expected returns of up to 8-10% net).
Prices have excelled in the past 2 years, Dubai’s market recovered very fast after the COVID pandemic, the confidence in how it was controlled was a large contribution but also the desire for a change of pace and lifestyle enhanced by the availability for freelance visas, more affordable, flexible company registrations and visas.
To give a idea of the progress of confidence in numbers I looked at a few developments that have recently completed by Developers and researched the price on launch to completion.
Cherrywoods – Meraas – Launch Date Jan 2019 – Handover Q1 2022
Cherrywoods is an exclusive collection of 3 and 4 bedroom townhouses.
3 Bedroom – Launch Price AED1,556,000 – Plot 1,938 sq ft – BUA 2,233 sq ft – Resale Sept 2021 AED2,000,000 – 28.5% increase
4 Bedroom – Launch Price AED1,972,000 – Plot 2,713 sq ft – BUA 2,634 sq ft – Resale Dec 2021 – AED2,600,000 – 27.4% increase
Act 1, Act 2, Downtown Dubai – Emaar – Launch Date August 2016 – Handover Q1 2022
Two towers out of which one comprises 56 Floors while the other comprises 46 Floors. The project will feature 718 residential units including one, two, and three bedrooms, and penthouses.
Two Bedroom – Launch Price AED2,322,888 – 1,111 sq ft – March 2022 AED2,701,750 – 16.3% increase
Beach Vista – Beachfront – Emaar – Launch Date Jan 2018 – Completion Jan 2022
One Bedroom – Launch Price AED1,410,888 – 745 sq ft – March 2022 – 712 Sq ft AED1,900,000 – 29.5% increase
Two Bedroom – Launch Price AED1,940,322 – 1,164 sq ft – Feb 2022 – AED4,100,000 – 1,164 sq ft – 71% increase
So the next question is, how long will this last? as reported in the UBS Global Index Report 2021, Dubai was the ONLY ‘undervalued’ major city in the top 25, the above shows the rebalancing of demand and supply, and with the above reason in the start of this report I am quite confident in speculating that investing in real estate in the Emirate of Dubai will not end anytime soon.
Please get in touch if you would like any advice on your property or an updated property valuation.
Laura Victoria Adams
March 2022
UBS Report https://theagentdubai.com/2021/10/23/ubs-global-real-estate-bubble-index-2021/
Data collated from propertymonitor.ae