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If in 2021 and 2022 demand for Dubai property had a boost from 'external' factors, in 2023, it will be about internal dynamics. And then there is the Golden Visa program. Image Credit: AP

Back when 2021 was drawing to a close, I would boldly claim that 2022 was going to be the best year ever for real estate. Several record-breaking transactions later, here we stand, looking back at a buoyant 2022.

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Not only was it a phenomenal 12 months for the city, but on a smaller scale, we have had numerous personal and professional successes as a company. There have been many editorials about Dubai’s sharp economic recovery in a post-Covid landscape due to a well-managed - and implemented - response from the government.

A Dubai strategy that clicked

It’s something that bears repeating, as that created the foundation off which the city could build its current success. By highlighting a sense of personal safety and security in a world where uncertainty was the order of the day, Dubai sent a clear message – this is the place to be. Expo 2020, which was delayed by a year because of the pandemic, was able to generate even more hype as a result, ensuring that both the end of 2021 and the start of 2022 were incredibly strong.

And thanks to the FIFA World Cup in Qatar, there has been a tremendous level of activity in both the city’s long-term and short-term rental markets. Even as the Expo was winding down in the first quarter of the year, we began to get a huge influx of European investors who were on the lookout for a stable market amidst geopolitical turmoil.

As a result, many of the city’s most prime communities witnessed a rise in property value and in certain areas – particularly Palm Jumeirah – it is becoming more commonplace to see high-end villas being listed at upwards of $50 million with rents well above the $1 million mark.

We benefited hugely from this buoyancy in the market, particularly in the rental sector. The level of activity led us to splitting our leasing team in two – one for villas and one for apartments. In terms of transactions, we broke a few records this year. On the Palm, we signed the highest ever rental at Dh4 million for six months; plus we had the most expensive rental in Jumeirah Islands at Dh1.2 million.

Cash-based deals

This underscores the change in demographic of buyers and tenants – a larger number of HNWIs now see Dubai as a place to call home and are able to put money down on the property of their choice. The number of cash buyers has risen significantly and, in prime villa communities, accounts for a little over 40 per cent of the market share.

Mortgage registrations have gone up quite a bit as well, as finance buyers aim to stay ahead of rate increases. But overall, the market is not over-leveraged as there is a very healthy number of cash transactions taking place. That’s good news for those who are worried about a repeat of the 2008-09 crisis. It is a vastly different scenario to what it was like back then, and the overall outlook for the future is bright.

I believe that 2023 is going to be an interesting year to look at in a post-Covid world. We have already seen some Covid fatigue setting in with the change in property searches across the city.

Two years ago, both buyers and tenants were leaning heavily towards villas with large interior and exterior spaces to have more privacy and security. In 2022, there was renewed interest in apartments as the city has fully opened itself up again and everyone is feeling much more social.

No external boosters in 2023

This will also be the first time in two years that there isn’t a big global event like Expo or the World Cup taking place, so I’m keen to see how the market fares without any external boosts. Though I don’t think any such boosts will be needed, given the way the city has positioned itself on the world stage of late.

Legislative changes such as the introduction of the Golden Visa helped to build investor confidence a couple of years ago. Now, with the broadening of eligibility criteria for a Golden Visa, we are already seeing a larger volume of enquiries from overseas buyers. T he big issue that has dominated the market and will continue to be a significant factor is the lack of new supply. There are some new units slated to be released in 2023, but so far it seems unlikely that they will be able to satiate the current level of demand.