Dubai market summary of the year by International Bankier.
The professional financial publication International Bankier has released a summary of the main trends and results of 2021.
In 2020, Dubai’s economy suffered the worst of the pandemic, but the past year not only prevented losses but also broke several long-standing records.
In government regulation, several reforms have been implemented to lower the threshold of entry for foreign investors. For example, mortgage interest rates have been lowered to 20%, and the requirements for a three-year resident visa have been reduced from $272,000 to ~$205,000.
During the fight against coronavirus, on the one hand, many quarantine restrictions were relaxed, and on the other hand, a national vaccination program was launched. More than 20 million doses of the vaccine have been sold in the UAE, and more than 90% of the population has already been vaccinated.
The demand for real estate from foreigners from Europe and East Asia is rapidly growing. There is a partial gap between supply and demand, which led to an overall price increase of 4.4% on average by the end of the third quarter of 2021. The number of transactions by the end of the same quarter exceeded the number of transactions for the whole of 2020 by 22.6%.
The main results of 2021:
- Interest rates on loans are historically low.
- Investors are more confident in the market.
- Buyers and tenants have shifted their interest from apartments to villas/townhouses;
- It is preferable to have more living space and privacy.
- Real estate purchase prices rose instantly.
- Villa prices are significantly ahead of apartment prices.
- Average rental rates decreased.
- Apartment prices decreased by 2.7%, but villa rental rates increased by 15.5%.
- Total sales for the 3rd quarter of 2021 are higher than the total annual sales of 2 of the last 10 years.
Overall, the Dubai real estate market this year belonged to sellers.
Forecast for 2022
The market will continue to grow during and after EXPO 2020. The World Exhibition will last until March 31, 2022. Some expect that the event will attract 25 million people.
It is expected that after EXPO-2020, foreign investors will also be interested in Dubai real estate, which will lead to increased demand and prices. The influx of foreign workers, which will boost demand for affordable housing, should also increase.
The Dubai market, as part of the global real estate market, should achieve a balance by the end of the second quarter of 2022.
