property sobha
The Dubai real estate is expected to continue its growth, especially in anticipation of the positive effects of the Expo 2020. Image Credit: GN archive

All those who chose to invest in the UAE real estate market at a time when the pandemic was raging around us have made one of the boldest and best decisions of their life.

With a robust supply, competitive prices and low-interest mortgage options on offer the pandemic provided an opportunity for several first-time investors to enter the Dubai real estate market even though the socio-economic climate was floundering.

Jyotsna Hegde, President, Sobha Realty

Today, fast forward a year later and these fledgling investors could have already recovered their cost with a fair percentage of profit attached. The Dubai real estate segment has shown indications of great recovery, transactions worth Dh42.4 billion have already been recorded in the three months to September 30, making this the best third quarter in Dubai’s history by the sheer value of sales transactions, according to Property Finder, the listings website.

But it would be worthwhile crediting all first-time buyers for the critical role they have played in the recovery of the property market. The total number of mortgages registered in Dubai during the first three quarters of 2021 has already overtaken the entire whole year of 2020. When 83 per cent of mortgage transactions this year have been conducted by people purchasing their first property in the UAE you know the role this segment has played in bringing back the spark to the market.

Another reason for Dubai’s real estate recovery is that property here is affordable compared to other major cities and financial hubs such as New York and London, making Dubai a perfect haven for international investors. Over the last year the city has seen a steady rise in investment from Russia, Kazakhstan, Asia, India and Pakistan. The UAE government’s constructive policy around Foreign Direct Investment has also supported the growth of this segment of investors.

Foreign investors with a taste for luxury have often also lapped up the high-end properties in this market. They are also a significant reason for the rise in the property prices here. More than 22 luxury homes worth more than $10m were sold in the first five months of 2021, the most since 2015, and up from 19 homes in the same period in 2020. This segment though niche, by virtue of high-value and rising demand have largely contributed to turning around Dubai’s real estate.

Demand for villas that arose during the pandemic has given the market a turbo boost. The desire for bigger space and open area has led villa prices to soar. Though this may bottom out, it underlines the key sentiment among people to stay in the emirate and make it their home. This sentiment is also encouraged by the plans of the UAE government to boost the economy by a slew of visa reforms that allow people to work remotely while living in the UAE, retire and live in the UAE, set up foreign companies in the emirate with 100 per cent ownership.

It is perhaps these norms, the economic stimulus and the speedy vaccination efforts of the health authorities that have made it safe again for Dubai to be open to business. As far as real estate is considered it will continue to rise, also in anticipation of the positive effects of the Expo 2020. With many new investors coming into Dubai for this spectacular event all eyes will be on it in the last quarter to tap into the potential it promises.

The last year has demonstrated the resilience and quick recovery potential of the UAE real estate sector and the ability we all possess to rise beyond our limitations and exceed all expectations.