Dubai property boom is defying expectations of slowdown

DUBAI: Investors from traditional markets like India, Pakistan and the Middle East will join those from Australia, the UK, Europe, Turkey and others as Dubai’s red-hot property market continues to attract international buyers, stated industry experts in a recent report.

Dubai has already defied predictions of a bust as demand continued to rise and deals worth $74.6 billion were executed in 2023, according to property consultant Knight Frank LLP. In the first three months of 2024, nearly $24 billion worth of property has already changed hands amid fear that the city’s property boom was about to make way for a bust cycle.

International buyers have traditionally been a major part of Dubai’s property market and a recent report by the Khaleej Times has now singled out investors from Australia, the UK, Europe, North America, Turkey and Iran being set to lead Dubai’s next growth cycle.

2023: Pakistanis remain among top 10 buyers of Dubai property, Indians top list

Industry insiders, the report added, maintain that investors from other traditional markets such as India, Pakistan and the Middle East will continue to be major contributors.

Dubai’s location, favorable tax-free environment, high returns and challenging environments in their home countries will be major reasons why the glitzy city remains on investors’ radar, according to industry experts.

Guillaume Giroux, the CEO of Elysee Vendome Real Estate quoted by Khaleej Times, said Dubai is about to finish its third property cycle, with a new one coming up soon that is expected to attract buyers from different countries.

Dubai’s high-end property sales rise on overseas demand

“French investors are still interested in Dubai’s properties, especially with uncertainties in Europe pushing them to look elsewhere,” he was quoted as saying.

“It’s predicted that many European nationalities will influence Dubai’s property market in the future.”

He added that high taxes and lower returns in their home countries are driving investors to seek better opportunities abroad.

Mouna Muller, client manager at Betterhomes, said as Dubai’s third property cycle draws to a close, the fourth cycle is anticipated to be fuelled by a diverse range of investors, added Khaleej Times.

“Europeans find Dubai appealing because of its attractive lifestyle, business opportunities, and favourable residency programmes. Iranians are seeking economic and political stability, along with cultural ties and proximity to Dubai. Turkish investors are attracted by the need for economic diversification, business opportunities, and the high demand for high-quality real estate in Dubai,” she was quoted as saying.

Dubai has most millionaires in Middle East, New York tops global list

Another expert suggested that even amid waning interest from wealthy Russians, they are set to replaced by Chinese buyers who will look at the UAE and China’s economic connection and strengthened political ties.

This comes at a time when analysts had expected the surge in property prices and rents — that had made Dubai one of the hottest property markets globally — to moderate or even drop by early 2024.

Those predictions haven’t materialised despite continuing tensions from the Israeli aggression in Gaza, rising cost of living and the fear that the property boom was set to end.

City-wide prices surged 60% since the end of 2020 while rents soared a whopping 83%, stated a report by Bloomberg that cited Cushman & Wakefield Core’s calculations.

“Dubai’s property market has long been known for sharp booms and busts, with one of its most dramatic downturns coming in 2009, following years of debt-fueled growth,” stated Bloomberg in a recent report.

“Prices rebounded in 2011 before slumping again in 2014 after an oil price collapse hurt regional economies. Since then, the government has introduced a series of reforms for buyers and developers to limit volatility including raising required down payments for mortgages to 20%.”

‘Dubai Unlocked’: Pakistanis own properties worth $11bn in emirate city, report says

The Dubai government’s handling of the pandemic and its liberal visa policies, including its coveted Golden Visa, have continued to attract foreign buyers.

The investment requirement for the Golden Visa was cut down from AED10 million to AED2 million in an effort to make it accessible to a lot more people.

Dubai was recently also ranked the 15th most expensive city globally for expatriates in Mercer’s 2024 Cost of Living report.

The United Arab Emirates (UAE) is also poised to stay as the world’s leading wealth magnet for the third year running, with a record-breaking 6,700 millionaires expected to make the country home by the end of 2024.

Since 1997, the AED has also been pegged to the US dollar at a fixed rate of 3.67 to 1, a key factor behind the ability to attract foreign inflows, especially when it comes to interest from Pakistanis who have seen their currency depreciate massively over the last few years.

In 2023, Pakistanis were placed seventh in the list of top buyers of Dubai real estate, according to a report by the emirate-based property consultancy Better Homes.

Business Recorder has reported earlier that interest of Pakistanis in Dubai’s real estate has pivoted a tad from buying properties for investment purposes to looking to relocate in the city.

Copyright Business Recorder, 2024