The real estate market in Dubai will remain resilient despite fear of global economic recession or slowdown in major economies this year, says an expert.
Hatem ElSafty, founder and CEO of Business Link, a business setup consultancy in Dubai, said the outlook for the real estate market is bright due to rising demand from high-net-worth individuals (HNWIs) and millionaires, especially in the luxury segment.
“As a business setup consultancy, we have seen a boost in the real estate and tourism licenses issued this year. Dubai’s strong portfolio attracts foreign investors and entrepreneurs to join the emirate’s booming property sector as they want to set up their business operations in the UAE,” ElSafty said.
Zoom Property Insights data indicates that the luxury market will continue to grow in 2023, with a 13.5 per cent yearly increase. The numbers suggest that the property market is showing no signs of slowing down, with a sharp rise in interest from investors and buyers alike.
Real estate a key growth driver
The real estate market in Dubai has been a key driver of the UAE’s economic growth over the past few decades as it attracts investors worldwide with its luxurious developments and tax-free environment.
The sector has experienced significant growth in recent years, with soaring property prices, and new residential and commercial projects. In 2022, the market surpassed Dh 240 billion — a 61 per cent growth from 2021, according to Unique Properties, a real estate agency in Dubai.
Industry experts believe that the hype in the real estate market can be attributed to several factors, including the country's successful Covid-19 vaccination campaign, the Expo 2020, and the UAE's newly implemented long-term visa system. These factors have boosted the country's overall economic growth, providing a conducive environment for real estate investment.
No impact of the recession
There are some concerns that the UAE's real estate market growth may be affected due to an anticipated global recession in 2023. But the latest data by Property Finder indicates that the fear is baseless as the sector began the New Year on a high note with 178 per cent growth in the value of real estate transactions and a 128 per cent increase in sales deals in January.
“The real estate market in Dubai is experiencing a surge in activity and hype, with demand for properties reaching an all-time high. Investors and buyers from across the globe are flocking to the country to take advantage of attractive investment opportunities and favourable market conditions,” according to ElSafty.
“The real estate boom is not limited to a particular market segment, as both residential and commercial properties are experiencing high demand. In particular, the luxury segment is seeing a significant surge, with HNWIs seeking exclusive and high-end properties,” the chief executive of Business Link said.
Capitalising on market conditions
Dubai’s real estate market has always been a popular choice for international investors, with its favourable tax laws, thriving economy, and world-class infrastructure. However , the demand for properties has soared to unprecedented levels in recent months, resulting in record-breaking sales figures.
Real estate developers are capitalising on the current market conditions, with several major projects underway, including the ambitious "Dubai Creek Harbour" and "The Heart of Europe" developments. These projects aim to attract investors worldwide and further boost Dubai’s position as a leading investment destination.
Despite the hype and enthusiasm surrounding the real estate market, experts advise that investors exercise caution and conduct due diligence before making investment decisions. As with any market, there are inherent risks, and investors should seek professional advice to make informed decisions. Now, particularly in the wake of the global rescission.
“The hype in the real estate market is a testament to the country's overall economic growth and attractive investment opportunities. With the continued interest from global investors and developers, the market is expected to continue its upward trajectory in the coming months,” ElSafty said.
Why is real estate booming
> Rising demand from high-net-worth individuals and millionaires
> Successful Covid-19 vaccination campaign, the Expo 2020, and visa reforms benefitted the sector
> Real estate developers are capitalising on the current market conditions
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