Watching the Dubai property market as closely as I do, it’s easy to see that almost anything can influence it. Even a single event can affect property prices, buyer numbers and the interests of those buyers. In 2020, Dubai will be hosting the World Expo, when millions of people from around the world will come together to share ideas and innovations, celebrating human achievement.
The awarding of the event to Dubai has put the location under the spotlight, but it won’t all be over once the Expo is finished. Any event of this size has long-lasting effects, and the legacy plans include stimulating a knowledge economy and drawing big businesses towards the Expo site after the event.
Huge amounts of money are being invested in the infrastructure of Dubai to prepare the city for the Expo. This will no doubt have a wider effect on Dubai, including the real estate market. I have been exploring how the Expo will influence the property market, and it seems clear that increased investment is going to raise property prices not only as the event approaches, but after it has finished in 2021 too.
Increased investment in the run-up to the Expo will be a key driver of property prices
According to analysts Reidin, off-plan sales in Dubai South increased by 285 per cent in the first seven months of last year compared to the whole of 2016. The site will be home to around one million residents and create 500,000 jobs upon completion.
If you are buying an off-plan property in Dubai now, or have already bought one, and want to make maximum return on your investment, the question you might be asking yourself is whether you should hold on to it until after the Expo. I will attempt to answer this question by taking a look at how the event will affect property prices in Dubai and interest in the city.
Gulf News spoke to a number of experts to ask their opinions on buying property in the run-up to the Expo 2020 Dubai. While some caution against changing your approach to purchasing property during this time, others suggest that altering your priorities could be wise.
Declan King of ValuStrat suggests using the criteria of “location, off-plan vs ready and payment plan vs mortgage deal” to make the best choices. He points out that these factors could positively and negatively affect the real estate market until 2021, including population growth and the introduction of the value-added tax.
The legacy consequences of the Expo events are an interesting point to consider. Development for the Expo has highlighted the south-eastern districts of the city, while improvements in infrastructure will benefit the region for years to come after the Expo has finished. The development for the Expo will have one of the world’s first 5G networks, and it is targeting tech companies, with Siemens having already agreed to build a new logistics hub there.
District 2020 will be a free trade zone and planners want the area to more than double in size to become a new city. These could all be good signs for anyone who is wondering whether it’s best to wait until after the Expo event to sell their off-plan property.
Both the market for sales and rentals are important to consider if you are thinking about the best time to sell. In the run-up to Dubai 2020 and during the event, an influx of both workers and tourists means that the demand for rental property is growing healthily.
If you have purchased an off plan property that will be ready before the Expo takes place, holding onto it could provide the perfect opportunity to start making a return on your investment. Later, you might hold onto the property and continue to make rental income from it, or you could choose to sell, taking advantage of any increased demand after the Expo.
Opinions are divided on whether property prices will rise or decline this year. Some have suggested at the beginning of the year that property prices could rebound, while others disagree.
However, when it comes to off-plan property, prices haven’t been following the same patterns. In fact, it’s the affordability of off-plan property in some areas that have affected property prices elsewhere. The Expo 2020 is set to give the property market a boost, which could certainly be carried after the event concludes in April 2021.
Selling your off-plan property now could prove to be a mistake. Holding onto it until Dubai 2020 is closer or after the event might be more sensible for many investors.
John Lyons is director of sales and leasing at Espace. The views expressed here are his own.
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