Dubai realty shows resilient performance

With its many offerings, the city continues to be a magnet for global investorsManish Khatri, Vice President, SPF

The UAE’s prominence within the Middle East as the premier real estate investment destination, with a similar investment profile to those of European countries, has been improved further recently.

This is supported by a recovery in non-oil activity and linked with intensifying investment ahead of the Expo 2020 to be hosted in Dubai. Dubai real estate, in particular, is a peculiar destination, the only one in the world where over 150 different nationalities invest in properties.

Right now is the perfect time for investors to look at Dubai for opportunities. The emirate has a huge opportunity to boost the growing real estate investment from global investors in the wake of the recent fluctuations in the European market. Moreover, the Dubai Government has consistently and proactively invested in building its infrastructure to support its diversified economy.

Construction continues among the largest industry sectors for future projects in the UAE, and the Dubai property market is experiencing a positive growth and proves the attractiveness of its real estate. With its high-quality residential construction activities, Dubai offers the perfect properties for overseas investors who prefer to invest in off-plan or new-build property. Since the real estate sector is one of the most lucrative avenues for investing money, one can always be assured of healthy returns.

Dubai serves as a combined vacation and investment destination for many global investors. Its lifestyle offerings make it a magnet for tourists and residents. From multi-cuisine restaurants to world-class shopping malls to a vibrant nightlife and entertainment, Dubai has become a home away from home for globetrotting investors.

Despite the tough market conditions, the Dubai property market shows a resilient performance, continuing to provide solid rental yields to landlords, especially the apartments in the affordable community developments across the city. The mid- to longer-term market fundamentals continue stronger with a slew of projects related to tourism driving the economy towards the Expo hosting.

The latest reports reveal that Dubai has achieved a high percentage of growth in terms of number and value of transactions in the real estate market. This helps the city keep the momentum as an attractive destination for property investment.

There are two main types of investors in Dubai realty sector: international investors and end-users. The international investors are still buying completed properties; however, the trend is to invest in off-plan properties as the yields are usually higher and the initial investment usually lower coupled with attractive payment plans. With regard to end-users, it primarily depends on their time frame plus their cash flow. If they are in the Middle East for a while and can afford to, they may well buy off-plan, rent for a while and wait for their homes. If they need a property immediately or have limited funds, ready properties are always an option.

The affordable housing segment has also turned into a lucrative niche segment catering to the needs of the low and middle-income earners. Major players in the sector are now venturing into this segment to cover the growing demand.

As the economy picks up and population growth continues, the development of affordable housing properties will increase the number of options. This will also contribute to the diversification of the economy and upgrade of infrastructure.

It is crucial for the market to accelerate the delivery of affordable and middle market housing over the short to medium term to satisfy current demand.

Source: Freehold


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