Dubai’s real estate market is off to an explosive start to the New Year.
According to a report, the city recorded 11,071 transactions between January and February. This is the highest number of transactions it has ever seen in the first two months.
According to a report by Savills, this record is the result of a strong 2021: Dubai’s total residential transactions last year reached $35 billion, the highest value since the global financial crisis.
Insider spoke with three Dubai-based real estate agents to get an inside view of the current market.
High demand for luxury off-plan homes
According to Thomas Fawcett (cofounder of Dubai-based luxury real estate firm the Property), demand for off-plan properties. Fawcett stated that projects due for completion in 2024 or 2025 sell out every day.
In March, the Financial Action Task Force, an international money-laundering watchdog, placed the UAE on its “gray list.” The UAE Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism responded by stating that the UAE is committed to fighting financial crimes and would work closely with the FATF “to address the areas of improvement quickly. “Posh places in Dubai and its market are still popular among investors, despite its title.
Fawcett stated that investors have a tremendous opportunity to find a project with a good off-plan and look ahead for two to three or four years, looking at the market’s trajectory and then hopefully making capital appreciation on their purchases.
Russian investors have long loved Dubai’s luxury real estate market. However, the conflict in Ukraine has boosted Russian investment. Fawcett stated that Russia is requesting more and more of its services every day.
“It’s grown, obviously, with the uncertainty of Russia. And what’s happening,” he said. ”
The UAE has not imposed sanctions on Russia, unlike the West. It is still one of the few places where Russian money can be accepted, but it’s now challenging to complete the transaction with the falling rubble and the sanctions.
Fawcett stated that Russians seeking to invest in Dubai’s real-estate market said, “They want to purchase, but they literally cannot deliver the payment.”
The conflict accelerated the decision of Ukrainian buyers to buy
According to Khadija Otmani, a partner at Driven Properties, Russia’s invasion has increased demand from Ukrainians seeking refuge from the conflict. She explained that these were people considering property purchases before the attack.
For a long time, they have been considering it. Otmani said that they just bought it faster than planned instead of waiting. He specializes in villas and penthouses but mainly deals with properties above 5 million euros ($5.49million).
CNBC reported that the UAE had removed and then reinstated a policy that allowed Ukrainians to enter the country visa-free earlier this month.
A factor in the pandemic was also Dubai’s opening of its international borders to foreigners in July 2020. Otmani explained that the demographic shift in Dubai’s luxury real estate investors occurred as more confidence was placed in the government’s COVID-19 management.
Her clients were mainly from India, Kuwait, and the Gulf. Otmani saw increased demand from European and Asian clients as the pandemic progressed. This included people who were not interested in Dubai before.
You can complete your purchases in Dubai through a Dubai investor visa without ever stepping foot on the ground. The process of purchasing real estate has become virtual all over the world.
This includes more than just the signing and payment of contracts. It also has live streams of house viewings — Dubai is no exception.
“Many of my clients, I don’t see them,” stated Nate Dania. He is the founder and CEO of Plan B Advisory, which oversees prime property investments and residency solutions.
We’ve noticed a shift in the number of clients who purchase remotely, particularly for off-plan projects. There’s nothing to see.
Dania explained to Insider that such deals could be closed following a Zoom call and a live stream of the show apartment if it exists. He is going to close virtual deals on Six Senses Residences by Select Group and One Palm by Omniyat. Both are located on Palm Jumeirah.
One of our clients was located in Los Angeles. This is quite far away. We did everything remotely. Dania stated that she sent all information to Six Senses Residences.
He said, “It was approximately $6 million.”
Why is the price rise so dramatic?
The UAE’s property market is recovering thanks to government initiatives such as retirement permits and remote workers. The extension of the 10-year gold visa program, and the economic boost provided by Expo 2020 Dubai.
Markets have also been helped by the country’s extensive coronavirus vaccination program, which has kept the number of cases relatively low compared to other countries.
The real estate industry has also seen increased activity due to the increased demand for space and amenities. The rise of those who work from home over the past twelve months.
“We have seen payment plans shrinking and post-promotion mortgage rates rising in 2022. “Despite all this, the residential transaction volume in Dubai is still at historic highs,” said Taimur Khan, head of research Mena at CBRE Dubai.
Dubai’s private sector economy saw a sharp improvement in business conditions, with the seasonally adjusted IHS Markit purchasing managers. Index rose to 54.1 in February from 52.6 in January.
A reading above the neutral level of 50 indicates economic expansion. A reading below it points to contraction.
David Owen, an economist from IHS Markit, stated that Dubai’s new business growth is a “promising indicator that the Omicron [Covid-19] variation has only had a minor effect on the economy compared to previous waves of this pandemic.”
Conclusion
Dubai’s vision of a post-pandemic highlife has gained momentum as foreign investors look to “play a favourable role in the economic recovery.
