Known for its luxurious, high-on-amenity properties, Dubai’s real estate segment has become increasingly competitive, creative, and enticing for investors worldwide. In 2018, a positive shift was witnessed by the country’s realty market. The sector underwent a major revamp with relaxed laws for foreign investors, new initiatives to drive investments, and new project announcements. Looking at the past trends and an in-depth data analysis, 2019 looks optimistic for the real estate companies in Dubai, property developers in Dubai, as well as prospective investors.
Before we get down to the real estate trends of 2019, let’s understand the performance of the Dubai property market in the past few years. Severe stress was affecting the sector in 2015. Due to several reasons such as drop in oil prices, strong performing currency (AED), imbalance of demand and supply, and mortgage cap amongst others, the rent average reduced by 7% and sales went down by 5.6%, according to Saviils. However, recovery has begun for the market since 2017. The sector’s recovery has started at a fast rate and it will give profitable returns to investors in the next few years, as per experts and property developers in Dubai.
The Trends That Are Reshaping The Real Estate Market In Dubai In 2019:
10-Year Residency Visa:
A 10-year visa is being offered to investors, talented professionals, and others. Dubai has majorly been an investors’ market; therefore, this new grant will give investors more confidence to invest in the real estate sector. Also, the number of workers in the UAE will spike owing to this visa reform. As a result, the demand for housing will rise. This will give revenue earning opportunities to real estate investors.
Dubai 10x Initiative:
The launch of the Real Estate Self-Transaction (REST) platform was announced under the Dubai 10x Initiative. This platform allows investors to manage all their property-related transactions digitally. Along with this, there are other services offered by the platform. These include connecting estate owners to investors and valuators. This will reduce the time and cost involved in the related processes. The enhanced transparency will attract more investors to the Dubai property market in 2019.
The growth rate for the UAE in 2019 is estimated to be 3.7%, as per the International Monetary Fund (IMF). Increasing spends on infrastructure and the overall real estate sector development to pique the interest of more investors and improve the sector’s rate of recovery is being planned as part of the government’s Expo 2020 goals.
100% Foreign Ownership:
A law has been passed in the UAE, allowing 100% foreign ownership of companies. Any foreign company who wants to establish its onshore entity in the UAE would earlier have to collaborate with a local company. H0wever, after this law, certain companies can build their presence in the region without any local support. This is sure to invite more companies to Dubai and thereby increase the demand for properties in the country.
According to various reports, real estate transactions in the last week of 2018 amounted to AED 19 billion; 2019 will see this trend continue. They also indicate that investor confidence in Dubai’s property market is witnessing revival. The fact that 65% of properties are scheduled to be completed this year and that many more are in the construction pipeline make Dubai a ‘buyers’ market’ until 2020.
Our Final Thoughts
A positive impact will be made by these game-changing trends and the sentiment towards Dubai’s real estate sector will change. Now, when there is a market correction, it is the right time to invest in this sector. What are your thoughts and predictions for Dubai’s real estate market for 2019? Let us know in the comments section below.