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What is the future of the real estate market in the UAE?

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future of real estate

After the decline of the property market due to the pandemic, it has grown since the end of 2020. In addition, many aspects make the future of real estate in the country look promising for everyone. Also, experts point out that this growth will continue over time, especially due to the economic boost.

In this article, you will be able to get an idea of what is currently happening in the local real estate market. In addition, thanks to what is currently happening, the projections forecast a very interesting market. Next, you can see in detail each of the aspects mentioned:

1. How is the real estate market in the UAE generally like?

2. What is the future of real estate in the United Arab Emirates?

3. What are the trends affecting the UAE real estate market?

4. How can we help you learn more about the future of real estate in the United Arab Emirates?

1. How is the real estate market in the UAE generally like?

future of real estate

In the year 2021, the real estate market in the emirates experienced growth and recovery compared to previous years. As well, a report indicates that 61,300 properties were sold and prices had a moderate increase. Since 2014 when it had reached a peak, the market was affected by a price drop of 20-30%.

Thus, this negative situation was due to an excess in the supply of construction projects and the pandemic in 2020. However, from the end of that year to the end of 2021, property prices began to rise. Therefore, the future of real estate augurs a continued increase and improvement of the market in the UAE.

Likewise, compared to the highest point (in 2014), there was an increase of 9.7% in 2021. Likewise, the market value increased by 109% compared to the previous year, from 72 billion to 150.8 billion. Therefore, the property market in the future looks promising in all of the Emirates.

2. What is the future of real estate in the United Arab Emirates?

To make a forecast regarding the future of real estate in the Emirates, you have to analyze the current trends. The future is promising both for those who work in this market and for the client in search of properties. In the next section, you can review important points to consider when looking at real estate’s future. 

2.1 The real estate market continues to grow

Experts predict that the future of real estate in the emirates will grow, and it is already in that process. Therefore, an example of this is that the value of real estate transactions in Dubai broke an annual record in 2021. Therefore, there is general confidence that the growth of this commercial sector will only accelerate in the following years.

In the year 2021, both in Dubai and Abu Dhabi, real estate transactions improved compared to the previous 2 years. For example, AED 114.2 billion was transacted in Dubai, and AED 71.5 billion in Abu Dhabi. This is a good example of why the future of real estate in the Emirates looks promising to all.

2.2 The future of the real estate and the increasing demand

Even though real estate prices have increased, the demand has not decreased in the Emirates. At the beginning of the year, there was a further price appreciation since mid-2021 with the increase in transactions. Likewise, the demand for various residential segments had an increase in demand that began in 2021.

One of the projections indicates that villas will represent only 15% of the stock in the market between 2022 and 2025. Therefore, villas will outperform apartments in the property market in the future. For example, in 2021 in Dubai there were deliveries of 37,000 residential units of which 16% were villas.

In addition, according to experts, real estate demand will continue to grow even with the increase in market prices. Therefore, this predicts an increase in profits for real estate companies in the territory of the Emirates. However, in the long term, there may be a shortage of supplies and price maintenance can affect the market.

2.3 Places in the UAE where demand is growing

In 2021, in Abu Dhabi, the sale amounts in the islands and real estate projects reached AED 11,815 million. This shows that the capital is one of the Emirates that represents the real estate future of the UAE. Likewise, most real estate agents report that during the pandemic the greatest demand was for starter homes.

This type of house is what people or families looking for a home of their own for the first time usually look for. In addition, they commonly use a combination of financing through mortgages and personal savings. Likewise, they are houses or apartments that have a specific design to meet the needs of those who buy for the first time.

On the other hand, Dubai, a destination where luxury homes predominate, recorded a comparable level to 2015. Thus, there were sales worth AED 36.7 million, as buyers took advantage of the post-pandemic recovery. In contrast, there were changes in both primary and primary property acquisition in the Emirate of Dubai.

In this case, we are talking about new properties, housing development projects, and even new launches. Also, the future of real estate is that demand grows in general, although some sectors grow to a greater extent. For example, the segments that have shown an increase are independent homes, apartments, and flats.

In the case of independent dwellings, they are single-family houses that are not joined to another house or building by a common wall. In the same way, buyers want their homes to be as close as possible to services. Most of those looking for a housing complex highlight the metric in the Middle East.

2.4 Having cheaper options will boost the market

Another option that shows that the future of real estate looks promising is the offer of cheaper options. This is because many fintech companies have taken the UAE as an access point. Thus, these have presented lower-cost options so that the inhabitants can acquire properties.

Furthermore, this point became clear with the Covid-19 pandemic, with the changes related to real estate technology. This way, technology has now served to improve the affordability of real estate. Much of this has to do with the decline in prices and costs caused by the pandemic.

For example, there are currently a variety of platforms for partially owning property in the UAE. In these, shareholders can use the REIP (Real Estate Investment Platform ) to make investments in the real estate sector. In this case, through crowdfunding, you can obtain participation under the investment made.

For this reason, technology plays an important role in the future of real estate in the United Arab Emirates. For example, these crowdfunding platforms allow investors to potentially make a profit. Thus, investors can earn by renting these properties and selling their shares in them.

However, the authorities regulate the schemes through the Dubai Financial Services Authority (DFSA). In addition, these platforms offer the opportunity to make investments in properties with a variety of costs. Therefore, there are a variety of opportunities that investors can take advantage of and forecast a good real estate future.

2.5 Is it the right time to buy a property?

The future of real estate in the Emirates looks quite promising for all involved. However, according to the current market, it is a good time to invest in a property in the United Arab Emirates. This is due to the low-interest rates on mortgage loans that are still stable.

Likewise, it is also conducive thanks to the loan-to-value ratio, as well as the reductions in property prices. Also, you should take advantage of the fact that service charges have decreased. In addition, there are benefits to entice buyers, such as service charge waivers.

Similarly, real estate analysts have highlighted that low-interest rates and mortgages will allow the segment to be boosted. Therefore, the future of real estate will allow investors to gain more confidence in capital gains. In addition, one of the keys to the increase in demand was the decisions of the UAE authorities.

For example, the authorities established new programs related to normal visas and the expansion of the limit for sea bream. In this way, it seeks to attract foreign professionals to the United Arab Emirates and thus further boost the economy. This is accompanied by attractive mortgage rates, in addition to the change in demand patterns for properties.

To this, we must add something that we have constantly mentioned, the increase in property prices. For these reasons, many professionals who want to invest in real estate have seen the Emirates as a good place to do so. Whether for work reasons or also for those who want to make the country their new permanent place.

In conclusion, the property market in the future is encouraged by the increasing demand and accessibility.

3. What are the trends affecting the UAE real estate market?

future of real estate

As we have already mentioned before, the year 2021 was full of good news in the local real estate market. However, it is important to know the trends that the market is showing to foresee the real estate future. The trend that marks the real estate market in the UAE are:

As mentioned in the previous sections, economic growth, especially in Dubai, has been the best in many years. Thus, thanks to government policies, foreign investment has seen an increase in the country. The introduction by the government of the golden visa encouraged the arrival of international talent to the country.

Likewise, the main purpose of this action was the offer of a permanent residence for said talent, as well as its retention. Similarly, thanks to the elimination of the need for a local sponsor to be able to have a company, it stimulates the economy. In addition, the central bank forecasts that this 2022 GDP will grow twice as much as it did last year.

Thus, while in 2021 the registered growth was 2.1%, this year there is an expectation that it will reach 4.2%. Additionally, population growth, thanks to the growing number of people moving to the country, accelerates all sectors of the economy.

On the other hand, the growth of the real estate market has attracted the attention of investors. Thanks to increased infrastructure, both commercial and residential, the local real estate market have outperformed other major markets. In 2021 there was a good dynamic between supply and demand, in segments such as high-end and villa.

Therefore, thanks to these and other characteristics, they ensure that the future of real estate continues its constant growth.

4. How can we help you learn more about the future of real estate in the United Arab Emirates?

The real estate market of the country has been affected in recent years, among other things by the Covid-19 pandemic. However, since the end of 2020, both demand and property prices began to grow. Thus, with this trend, the future of real estate seems to herald sustained growth in the territory.

With Connect Property, you can find your dream property in the UAE using our extensive listings. Likewise, we offer to consult so that you can know when is the right time to buy or sell. You can even count on our extensive experience in buying and renovating a property and then selling it.

Do you still have doubts regarding the future of real estate in the UAE? You can ask us any questions through our telephone number +971 43 316 688, where you will be taken care of by our professionals. Likewise, you have at your disposal the email address contact@connectproperty.ae, for any questions or doubts you may have.

If you want to find valuable job offers and get the opportunity of a lifetime, send your CV to contact@thetalentpoint.com. Similarly, you can visit thetalentpoint.com to apply for diverse vacancies in your sector of expertise.

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