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High-end domestic investors lead Dubai property market recovery

DUBAI LUXURY PROPERTY VIEW
The Dubai property market is also looking at potential gains with Expo 2020 taking off this year.

The demand in the Dubai property market stems largely from high-end domestic investors, Haider Tuaima, Head of Research - Real Estate at ValuStrat, recently said.

Speaking in an interview with Mansion Global, Tuaima noted that growth in the Dubai property market will be gradual due to incoming supply, especially with apartments. At the same time, month-on-month increases are hinting towards “accelerated growth” in the short term.

Highlighting government policies, attractive mortgage rates, and the remote working trend, Tuaima said that the Dubai property market is likely to be boosted by foreign investment and interest from international home buyers with the advent of Expo 2020.

Other experts have previously echoed this thought, seeing a longer term impact of Expo 2020 on the Dubai property market, over a boost in the interim. 

Further, affordability is also increasing in the Dubai property market through higher loan-to-value ratios, with the ceiling limit on LTV ratios increased to 85% for first time home buyers, from 75%.

In terms of properties that are currently popular with home buyers, Tuaima noted that home buyers were still keen on bigger spaces, namely villas and townhouses. They were also moving away from the city centre, although existing properties have started to gain more interest than the off-plan market.

THE DUBAI PROPERTY MARKET HAS SEEN A NUMBER OF WINS THIS YEAR

On the rebound, the Dubai property market has registered a number of high points as it recovers from the shocks of 2020. Government initiatives, such as increased metro connectivity, residence by visa schemes, and, as Tuaima noted, tenant-friendly financing, have largely supported this growth.

While yet to reach pre-pandemic levels across the board, the residential sector, which is largely responsible for the ongoing recovery, saw record breaking sales on a quarterly level in Q2 this year.

The market is especially popular among Indian HNWIs for second homes. The surge in residential real estate is driven primarily by a demand for larger homes amid safety, remote working and social distancing concerns surrounding COVID-19. Buyer interest in luxury units is also on the rise, with prices of high-end villas stabilising in February this year.

At the same time, prices are likely to remain tenant-forward as the Dubai property market braces for incoming supply. Overall, the UAE property sector is looking at a recovery period of around two years to pre-pandemic levels, despite a short term pressure on prices.

 

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