After a troubling few years for the Dubai property market, it appears the region is beginning to find its feet once more. Following on from promising signs in the market, from an upturn in the demand for affordable housing to the value for money given by prime property, the market is on track for recovery. This is attracting overseas investors back to the market, with these investors showing more confidence and optimistic outlooks on the state of Dubai property. Citizens of India, Pakistan and Britain continue to lead the non-Arab investors in Dubai’s real estate sector with official and industry executives forecasting bright outlook for the industry. With this, it looks like Dubai could overcome recent struggles and regain its place as a leading property market globally.
Success for global investors
Speaking to the Khaleej Times Sultan Butti bin Mejren, Director-General of Dubai Land Department (DLD), says Dubai remains an attractive destination for investors seeking a safe return on investment. This is clear from the emirate’s base of investors alone, consisting of individuals belonging to more than 217 nationalities from all over the world. This diverse base shows the rise of the market onto the global stage.
Sultan Butti bin Mejren comments: “The Dubai real estate market continues to show growth, driven by general optimism and confidence in the real estate sector.”
Gulf Cooperation Council investors made 2,500 transactions worth Dh6 billion while other Arab investors made 1,250 transactions worth over Dh2 billion. Foreign investors made 5,000 transactions with a total of Dh10 billion in Q1 2018.
Among nationalities, 1,264 Emiratis made 1,587 transactions worth Dh4 billion followed by 1,387 Indian investors injecting Dh3 billion in 1,550 transactions. Saudis came in third place with Dh1.3 billion followed by Pakistani, the British, Chinese, Egyptian, Russian, Jordanian and Canadian nationals ranking from the 6th to 10th, respectively.
According to DLD, Q1 2018 saw a total of 9,092 sales transaction worth about Dh19 billion, 3,717 mortgage transactions worth over Dh30.6 billion, and 950 other transactions valued at Dh8.4 billion.
While Dh18 billion was invested in the emirate’s property sector in Q1 2018 by 8,071 investors in 9,642 real estate investments. This is compared to Dh40 billion investments made through 15,501 investment transactions made in Q1 2017.
Bright outlook
However, this adjustment period of decline is not expected to continue for long. DLD Chief Bin Mejren says the current results show strong momentum in the real estate sector, which is expected to continue throughout the rest of 2018 and into 2019.
Speaking in the DLD’s report, Bin Mejren states: “Analysts and experts predict an upsurge as we enter 2019 with unprecedented strength, as many strategic infrastructure projects are due to be completed in Dubai in preparation for Expo 2020.”
This sentiment is echoed by many leading advisors and experts in the Dubai property market. Speaking to the Khaleej Times, Partner and Director of Danube Properties, Atif Rahman, comments: “Dubai will continue to attract investment in real estate for a few simple reasons: return on investment is still very high as we have demonstrated in our properties – offering 15-20% upon handover, when the investor has just paid less than 50% of the property. Affordable and mid-market segments will continue to drive buying and selling activities.”
Overall, the outlook for Dubai property is promising. While it is not yet steady, it is showing clear signs of moving towards stability in the upcoming years.
About Samir Salya
Samir Salya is the Chairman of Reign Holdings and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.