Recent events have affected Dubai’s property market. The COVID-19 pandemic has slowed Dubai’s recovery, and led to a halt in the property market, but the recent vaccination program is accelerating recovery. Meanwhile, a supportive government has introduced new economic reforms to promote property prices. A new residency visa for retirees and remote workers is also boosting property prices. Developers have stepped up their game in Dubai and have introduced distinct packages.
Increase in short-term rentals
According to Asteco, the rental rates for villas will increase by 10-15% over the next three quarters. The short-term rentals have fallen by as much as 20-30% since the end of Expo 2020, which was attributed to the holy month of Ramadan and the summer season. The report also claims that the demand for rental property will increase by around 2% in the next year.
The tourism industry has survived tough times and has flourished in the UAE. Real estate has also grown with the development of the Covid-19 pandemic and a rise in short-term rentals. Moreover, this new trend has provided real estate owners with an added revenue stream. Besides, it is also beneficial for foreign investors, as it has helped them get free residency in the UAE.
Increase in demand for luxury homes
The rise in interest among international investors is expected to fuel an increase in the demand for luxury homes in the UAE property market in 2022. According to a recent study, the post-Expo market landscape looks ‘bright’ with transactions up 30% year on year. Average property prices in January 2022 increased by 35 per cent. Despite the challenges faced in the past, the post-Expo environment is brimming with new opportunities for home buyers.
Several factors have driven the rising prices of luxury homes in Dubai. Recent policy reforms, the strong recovery from the pandemic and the growing popularity of Dubai as a long-term residence are all contributing to the increase in demand for brand residences. This growth has led to a substantial increase in property prices, particularly in prime locations. Expatriates and locals alike are buying luxury properties in the region.
Impact of Covid pandemic on Dubai’s real estate market
The impact of the Covid pandemic on the UAE’s real estate market in 2022 is still being studied. The real estate and hospitality sectors in Dubai are expected to recover from the crisis as the country has world-class infrastructure, ongoing urban greening initiatives, and an exceptional quality of life. In the first quarter of 2021, the real estate sector exhibited resilience and bounced back from the Covid crisis. The government’s initiatives are expected to continue to drive price acceleration, but the full impact will only be known in a few years.
The Covid pandemic has brought uncertainty to the UAE’s real estate market, but the region is showing signs of a rebound in the sector. The UAE Land Department recently published statistics showing that Dubai house prices are expected to increase by 3.0% this year and 2.5% in 2022. The increase in prices comes amid accelerating vaccination programs and supportive economic reforms. In addition, the lack of supply may lead to inflationary pressures.
Impact of Expo 2020 on Dubai’s real estate market
World Expo 2020 will have a major impact on Dubai’s real estate market in 2021 and beyond. Officials expect to attract 25 million visitors to the Expo, seventy percent of whom will come from outside the UAE. As a result, the real estate market in Dubai should benefit from a boom in tourism. In addition, the re-establishment of ties with four Arab countries and stability in relations with Israel should further support the property market.
The government of the UAE has also taken steps to benefit from the mega event. The government is creating two new immigration policies based on best practices of developed countries to accommodate visitors. Under the new immigration policy, foreign nationals can own 100% of business in the UAE and live there without a local sponsor. Furthermore, the UAE government plans to grant visas that are valid for five and ten years.