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Dubai's real estate market has been experiencing the fastest spike in recent years
May 09, 2024 | Staff Reporter | UAE | Developers
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Dubai real estate is experiencing a bloom overpowering established markets like London, New York, and Hong Kong. the reports by various real estate companies have confirmed that the boom is going to last even in 2025. Despite the heavy rainfall, inflation, and other hurdles it is safe to assume that Dubai's property market is not going to have set setback any time soon.
One of the most luxurious destinations in the world, Dubai has been experiencing the fastest spike in the property market in recent years. The country underwent a significant transformation post-2008 financial crisis emerging as one of the world's leading financial hubs.
Real estate in Dubai played a pivotal role, constituting 8.9% of the economy. In the past 22 years, Dubai's real estate market has never seen such a drastic rise in interest rates as it did after 2023. Home mortgage approvals increased by 40%, while UAE's mortgage rates jumped from 2% in early 2022 to 5% in 2023, marking the fastest increase in a decade.
Dubai property investment has attracted top professionals in banking and financial services and crypto millionaires along with businessmen from all around the world. These investments are the result of the price drop post-COVID-19. The pandemic handling was a case study that further attracted investors to Dubai. Along with this UAE's banks provided additional mortgage offers to secure the top spot. Under schemes like ‘Ramadan Specials’, banks rolled out 5-year fixed rate mortgage plans, providing relative stability for the borrowers. Securing this if rates fell in the future, there was a liberty to refinance the deal.
With all the facilities and encouragement the property market in Dubai is running ahead in the world race.
The UAE government's open-door policy for foreign investors indicates a bright investing future in Dubai. According to Knight Frank’s Dubai Market Review, Dubai is set to deliver just 13,000 homes annually over the next six years.
However, inflation and a dynamic global interest rate policy have already hampered market growth. Geopolitical factors like the tensions in West Asia and the unabated Russia-Ukraine war cause uncertainty. Despite the possibility of the slowdown in Dubai’s real estate sector, it remains one of the most affordable luxury markets in the world, which only adds to its appeal among the international elite.
It is predicted that there will be a 5 percent increase in prime residential values in Dubai this year, positioning the city as the third fastest-growing prime residential market globally,
Emerging Trends in the Property Market
Dubai's real estate market offers a compelling proposition for both investors and residents. Beyond its reputation for luxury, Dubai is embracing sustainability. Eco-friendly developments and green building practices are gaining traction, ensuring the city stays at the forefront of modern living. This commitment to sustainability complements Dubai's existing strengths: affordability compared to other global cities, a diverse and safe environment, and a business-friendly atmosphere. Furthermore, the availability of affordable housing options alongside the prestigious Golden Visa program is attracting residents who view Dubai as a long-term home. This focus on long-term residency further strengthens the property market.
Dubai property market presents a unique and exciting opportunity. While established markets struggle, Dubai continues to experience a boom, fueled by government initiatives, a growing population, and a reputation for safe and luxurious living. Despite potential headwinds like inflation and geopolitical tensions, Dubai's commitment to sustainability, affordability, and attracting long-term residents positions it for continued success. Whether an investor seeking high returns or a resident searching for a vibrant and secure home, Dubai's real estate market offers something for everyone. Considering a move or an investment? Dubai is definitely a market worth exploring.
