Attracting more new investors boosted the direct demand for real estate
Sales recovery reflects optimism during 2021, as the investment incentives provided by the emirate authorities and government initiatives in support of population growth, assist the direct demand for real estate. During the first quarter of 2021, there are nine main supporting factors that have contributed to the growth of the value of real estate transactions in Dubai, increasing 44 % on an annual basis.
Factors supporting the sector's performance in Dubai during the first quarter of 2021 include:
1. Covid-19 vaccination
2. Amending citizenship provisions
3. Dubai Expo
4. Golden residency
5. Qualitative facilities
6. Increasing demand for larger spaces
7. Growth in real estate transactions
8. Reducing interest rates
9. Dubaiâ€™s as a hub
Covid-19 Vaccination: Thanks to the speed of vaccination campaigns
- Dubai's reserved its position as the best financial and business destination in the Gulf region thereby, helping to increase the demand for offices.
- Widespread Covid-19 vaccination centres in the UAE are a key driver of Dubaiâ€™s real estate sectorâ€™s recover in the first quarter of this year.
- Vaccination centres in the UAE help the economy to recover at a faster pace than other world nations.
Amending citizenship provisions
- Based on a number of terms and conditions, is a qualitative shift for the real estate sector, as it creates a new demand for the sector that decrease supply and paves the way for launching new projects.
- Amendment of some provisions related to the executive regulations of the Federal Law regarding nationality and passports, through which the granting of Emirati nationality to investors, professionals, talents and their families.
- There is no doubt that hosting the Dubai Expo 2020 and spending to develop infrastructure projects will enhance the demand for rent in the emirate, as well as boost investment in the real estate sector in the coming years.
- Research studies estimated the added value in the post-Expo period to be at Dh62.2 billion until December 2031.
- The real estate sector will benefit from the approval of granting golden residency to residents for a period of 10 years for several categories, most notably those with doctoral degrees, all doctors, and engineers in the fields of computer engineering, electronics, programming, electricity and biotechnology.
- These decisions may enhance the purchasing power of real estate as the targeted groups seek settlement in the country, raise the value of foreign investments inflows, and help create new jobs.
- The Dubai Emirates provides qualitative facilities to attract local, Arab and foreign investors, as it has decided to reform the Commercial Companies Law and cancel the requirement that some local companies have an Emirati shareholder and allow foreigners 100 % ownership in 122 commercial activities.
- This is expected to boost foreign direct investment in the UAE in general and the real estate sector in particular.
Growth in real estate transactions
- Dubai Land Departmentâ€™s data showed a growth in real estate transactions value to Dh68.6 billion in the months January to March of this year.
- 18.526 transactions and the value of real estate transactions was Dh47.7 billion, compared 14,684 transactions in the same period of 2020.
- Data showed that sales recorded an annual growth of 16 % reaching Dh24.8 billion, through 11,658 deals.
- Value of mortgages during the same period amounted to about Dh39.5 billion, with an annual growth of 76 % with 8,091 deals.
- Real estate donations reached Dh4.8 billion, with 828 deals during the first quarter of this year.
- Ready real estate share of sales was the largest at 80 %, equivalent to Dh19.8 billion, compared to 20 % of off-plan sales at a total value of Dh4.9 billion.
Increasing demand for larger spaces
- Risks of the pandemic diverted attention towards obtaining independent and larger living spaces.
- Remote work policies reinforced the tendency to acquire larger homes suitable for living and working together and these policies continue after the pandemic.
- Decrease in the number of new projects helps to reduce the real estate supply.
- Supports the growth of prices to satisfactory levels.
- Increases the attractiveness of domestic and foreign investment.
Reducing interest rates
- UAE banks have introduced a reduction in interest rates on mortgage loans.
- Encourages people to buy residential units instead of renting, at a time when prices have reached levels that make investing in real estate in Dubai a good opportunity.
Dubaiâ€™s as a hub
- Dubai's reserved its position as the best financial and business destination in the Gulf region.
- Help to increase the demand for offices.
1. Rankings on buildings
-Sheikh Mohammed bin Rashid Gardens ranked the best of the five areas in terms of sales value for apartments and villas during the first quarter of 2021, followed by Wadi Al-Safa 5, Wadi Al-Safa 7, Nad Al Sheba 1, and Al Thanayah Fourth.
- With regard to the apartment category, the lead came as follows:
1. Dubai Marina
2. Palm Jumeirah
3. Business Bay
4. Burj Khalifa
2. Dubai Urban Plan 2040
- Aimed at making the Dubai the best place in the world for living and working.
- Focuses on achieving a global development model supporting the well-being of society, empowering people and motivating them.