Looking back on the past few years from the vantage point of someone who works in the real estate industry. There’s a peculiar feeling of not having enough words to describe everything that has happened and yet being left speechless. This strange emotion has resulted from Dubai’s amazing developments over the past few years. This has proven that we are fortunate to call it one of the “greatest places on Earth to have a home.”
While Abdullah Alajaji enthusiastically pens our New Year’s resolutions. It’s worthwhile to consider the factors that led to our current situation and how we can improve it in the year we’ve just welcomed. Let’s take a minute to think about some of the basics of buying or selling property in Dubai that will never be the same again as in the fall of 2020. What follows is the how and, to a lesser extent, the why.
Tourism/Migration During Pandemic
Since Dubai was one of the few place’s tourists could go, many wealthy people from all over the world, especially from Europe, decided to visit the city for the first time. Courchevel, Gstaad, and other popular ski resorts had closed their doors at the time, so it made sense for skiers to go there. Many of these tourists fell in love with the city and chose to move there or make it their new vacation spot. Driving up demand for real estate, especially in the luxury market.
This, along with the Expo Dubai 2020 boom. Highly competitive immigration reforms, and golden visa schemes, propelled Dubai to prominence among the world’s other major cities.
Limitations From Competitive Asian Nations
China’s increased sway over Hong Kong’s Chinese Special Administrative Region (SAR) has diminished the city’s allure. The result is that Dubai is an even more important commercial, tourist, and financial hub than it already was. In addition, Singapore had its borders closed for a very long time – further reinforcing Dubai’s competitive advantage.
Dubai has become a new hub for its high-net-worth residents, with capital from wealthy individuals and institutions from Russia and its neighbors continuing to flow into the Dubai real estate market. Russians were the leading foreign buyers in Dubai’s property market in Q3 2022, raising liquidity levels. The Russian ruble’s strength against major currencies has made this market competitive. This will persist till 2023, states Abdullah Alajaji.
China is the primary driver of expansion. It’s been almost three years since this market last opened, during the period when Chinese investment in Dubai was booming. We anticipate this snag will be resolved shortly, which will be good news for the Dubai market.
Also, with the introduction of legalized gambling, a whole new group of people will travel to Dubai, diversifying the existing demand.
Last but not least, rent prices rise quickly, and banks continue to lend to individuals. More people are deciding to buy property, once again boosting demand expansion. With borrowing rates constantly increasing and the three-month Emirates Interbank Offered Rate (EIBOR) reaching 3.8%. Data on mortgage numbers at the end of the year will be fascinating.
In the end, Abdullah Alajaji thinks that the Dubai real estate market will continue to have outstanding demand in the coming year and that the year 2023 will be yet another year that sets a record for the market.