So far, 2022 has been an explosive year for the UAE’s property market, and this momentum is set to compound into 2023 as well. According to a study published in Bloomberg, the prices of premium real estate in Dubai have increased by 89 % over the last year. There are now more than 35,000 brand-new homes on the market. Bloomberg provided an excellent UAE property market forecast for 2022–2023, anticipating that as many as 53,000 additional units will be put into service. Although a portion of this has already been finished and is available for purchase, other regions will be built in response to customer demand. It is anticipated that this will push the real estate market to a level that has never been seen before.
What Drove the Growth of UAE’s Property Market in 2022?
Overall, the success of Expo 2020 is thought to have contributed, at least in part, to the growth of Dubai’s real estate market. During its six-month run, the event had over 24 million visits, with one out of every three visitors coming from outside. This occurred at a period when limitations were still in place, which restricted global travel. The fact that the city successfully held the festival while simultaneously resolving challenging issues relating to Covid will have been beneficial for the city’s public relations efforts.
In addition, the location known as Expo Village, which was once home to people from other countries working at the event, will be transformed into a residential community for people from the United States. The Expo site has also been converted into a new development that has been given the name “Expo City Dubai.” This new development will serve as a central location for thousands of inhabitants and companies.
Growing Desire for Ultra-Luxury Real Estate
House prices have surged by more than 100 % in famous districts like Palm Jumeirah, Jumeirah Bay, and Emirates Hills as affluent purchasers have queued up to grab property throughout the city’s major hotel complexes. For instance, in July this year, the acquisition of a property in Palm Jumeirah set a new record by selling for $82 million. Arabian Business indicates the city’s real estate receipts surpassed $325 million over two days in September. This was accomplished through completing 386 sales, 341 of which were purchases of apartment condos and villas located within affluent gated communities across the city.
One of Dubai’s most significant developments in the real estate industry is the ever-increasing demand for ultra-luxury homes. There has been a surge in the number of high-net-worth individuals (HNWIs), foreign purchasers, and investors from all over the globe who want to participate in this sector. Because of the world’s expanding economies, there has been a considerable rise in the number of investors from other countries over the previous few years. Most UAE property market forecasts anticipate that this pattern will go on far into 2023, with an increased number of international investors entering Dubai’s market.
Although many new purchasers originate from countries such as Switzerland, Germany, and France, affluent Russians have been coming to Dubai in recent years to park their money. The UAE is not one of the several countries in the West that have penalized Russian nationals as a result of their country’s invasion of Ukraine. Dubai was already a popular travel destination for Russians before it became one of the few safe havens to avoid the seizure of assets. As a result, the country has become a refuge for yachts owned by oligarchs.
Favoritism for “Off-plan” Properties
In Dubai, the most sought-after real estate alternative for purchasers is pre-construction or “off-plan” homes. Because these houses are constructed before they are put up for sale, you can purchase one of these pieces of real estate at a more affordable price than what you would have to pay if the house were constructed after you had purchased it.
Off-plan properties also offer more flexibility than buying an existing home because they enable buyers to customize their new homes according to their needs and wishes without waiting to construct a new house or apartment block, hence. This gives off-plan properties in the UAE property market a steep advantage over existing home purchases. This indicates that owners of off-plan properties may be able to finish their renovations more rapidly than those who purchase pre-existing buildings or flats with all facilities already included to save time and money throughout this procedure.
With an economic boom fuelled by increasing oil prices, Dubai’s property market rebounded rapidly from the devastating slump caused by the pandemic, with purchasers snatching up luxury properties after the city loosened restrictions quicker than other cities. Moving forward, this positive momentum will also fuel the sector’s growth in 2023.