Overseas investors, end-users set to drive Dubai property market

Foreign investors, end-users and District 2020 will continue to drive Dubai real estate sector’s growth this year as the emirate offers a complete lifestyle with an excellent infrastructure to the property buyers, according to reports.

Mortgage Finder, a tech enabled mortgage advisory service powered by Property Finder, said about 82 per cent of mortgages in the UAE last year were from first-time buyers and they are willing to reside within the property. The UAE residents accounted for majority of borrowers at 94 per cent while 90 per cent of borrowers opted for fixed rate mortgages.

Another report said the Dubai real estate is expected to continue its golden run post-Expo 2020 as foreign investors are returning to the market to capitalise on investment opportunities in the emirate.

Overseas investors are back

The Zoom Property Insights said Dubai property market attracted a total of 52,415 investors last year and recorded 72,207 new deals with a combined worth of Dh148 billion investment in various projects of the emirate. It reflects a 100 per cent growth in investment value while the number of investors and investments surged 65.6 per cent and 73.7 per cent, respectively.

“Out of the total investors in 2021, about 38,318 or more than 50 per cent, were overseas investors, who made 51,544 investments valuing Dh99 billion,” the Zoom Property Insights said, and adding that this upward momentum will sustain throughout the year, even after Expo 2020 drops its curtains on March 31,2022.

The emirate is gearing up for International Property Show (IPS) 2022, which is another event that will help bring foreign investment. Starting from March 24, it will welcome investors from Spain, Serbia and Montenegro, Austria, USA, Ecuador, Canada, and Mexico, it added.

Ata Shobeiry, CEO at Zoom Property, said the infrastructure, lifestyle facilities and visa reforms are some of the major reasons supporting the return of investors to the Dubai property market.

“Dubai’s excellent infrastructure, long-term visa options for overseas investors, and world-class facilities are some of the major reasons that attract overseas investors. Expo 2020 also played its role but going by the latest trends, I believe there will be increased activity in the market resulting from the return of foreign investors after Expo has concluded,” he said.

“The sustainability, economic prosperity, diversity in the market, and high returns are some of the other main reasons that make investors come back to Dubai real estate,” Shobeiry said.

Mortgage financing plays key role

Mohamad Kaswani, managing director at Mortgage Finder, said Mortgage Finder experienced an unprecedented growth with our 2021 transactions exceeding the previous two years combined.

Referring to the Dubai Land Department data, he said mortgage industry experienced a record-breaking year in 2021 with transaction values exceeding previous highs recorded back in 2017 by 26 per cent.

“We are energised by the trend in UAE residents choosing to put down firm roots by purchasing their own homes here. This is a trend we noticed following the lifting of Covid-19 lockdown restrictions back in mid-2020 and it has not slowed down,” Kaswani said.

“The improved alignment between valuations and purchase prices makes the mortgage process far easier for buyers. Furthermore, it is also a sign of maturing market behaviour as valuations moved in line with market changes,” he added.

District 2020 holds the key

Apart from the return of overseas investors, the transition of Expo 2020 into District 2020 is also expected to drive the Dubai property market in 2022. It is planned to be a mixed-use community, which will utilise 80 per cent of Expo’s resources.

As the Expo concludes in a few days, District 2020 will continue its legacy as a sustainable and human-centric future city. It will feature expansive business and retail spaces along with modern co-living, loft or urban-style residential units. The handover is expected to take place in October 2022.

Haider Tuaima, director and head of real estate research at ValuStrat said the District 2020 project will be re-purposing 80 per cent of the current Expo 2020 site and will become one of five major urban centres as per Dubai’s master urban plan 2040 announced in early 2021.

“District 2020, a future legacy of Expo 2020 is planned to have more than 200,000 square metres of grade A, LEED-certified, commercial and residential space, plus 45,000 square metres of green space. The location benefits from a direct link to the metro network, three major highways, 90 minutes from three international airports and one seaport,” Tuaima said.

He said demand has already been demonstrated from the signing of technology and innovation-focused anchor tenants such as Siemens, Terminus, DP World and Siemens Energy.

“On a strategic level, given its location and advanced infrastructure, there’s no doubt that District 2020 will be a successful hub for international business and act as a significant catalyst for the entire city,” he said.

> 90% of Mortgage Finder borrowers opted for fixed rate mortgages