In the past year, UAE, as well as Qatar, became the two most searched countries on the internet, courtesy the FIFA World Cup. The other reason UAE was in the news – Mukesh Ambani had bought the Palm Jumeirah mansion – the largest real estate residential deal in Dubai. On a second note, the real estate industry saw a rapid decline in 2019 and the early months of 2020. But it has seen an unprecedented boom for the last two years, 2021 and 2022. The major reasons for existing land owners and expatriates from other countries to scurry to purchase land, villas, or homes are the country’s lenient tax-free schemes, relaxed laws for overseas investors, new Government policies that initiate investments, announcements of new construction projects every day, unlimited employment opportunities and customised lifestyle options. This blog will focus on the real estate boom in the UAE which is constantly setting new trends in terms of global investment.
Reasons For Real Estate Boom In UAE
The UAE is growing in leaps and bounds in every sector, be it real estate, or technology. So, the construction of manufacturing industries, companies, villas, and tech parks is being built at a fast rate. To be noted is the fact that properties are getting sold or rented at the same pace. The UAE’s real estate news is always buzzing with new schemes/projects every day.
It has to be noted that not only are foreign construction companies making their mark with building projects, but local giants such as Dar Al Arkan are also in the fray. Also, there are many companies & websites which are working 24/7 to provide wholesome support to small time buyers to High-Net-Worth Individuals (HNWI).
As already known, the UAE has only 20% of the local population. The other 80% of the population, comprising of foreign nationals have been staying in the region for many decades, working in mainly private sectors and institutions. However, of late, they have started purchasing a large number of properties. In short, Indians and British nationals occupy first and second place respectively when it comes to buying properties.
Two Types of Real Estate Properties In the UAE
The real estate market in the UAE gets divided into two major categories.
In the first is listed the luxury residential homes, landed houses, man-made islands, apartments in towering buildings, condominiums & luxury houses/villas with private beaches. These types of residential spaces are found in cities of emirates such as Al Ain, Sharjah, Dubai, and Abu Dhabi. Overseas foreign investors, preferably HNWI buy these properties. As per a survey, the residential real estate market concerned with luxury in the UAE is widely predicted to experience an increase of CAGR of 8% between 2022 to 2027.
In the second category comes the homes and apartments preferred by working professionals who have recently relocated to the country.
As per the recent statistical survey, the real estate boom in the UAE attracted close to AED 30.5 billion on November 2021. To understand the happenings on a larger note, let us have a brief look on:
Top 6 Real Estate Trends In the UAE
The trend started in 2020 when there were severe Government restrictions for the local population to remain indoors. During this time, many in UAE realized the importance of having a local residence and also living in vast spaces.
- The demand for luxury properties in the UAE has doubled in the last two years. It reached its peak during the FIFA cup, and the Government supported the sporting extravaganza with relaxed visa policies and other schemes. The event took place no doubt in Qatar, but many visitors and tourists made the opportunity to purchase properties in adjoining countries such as Dubai, Saudi Arabia, Doha etc. Also, Qatar had limited accommodation facilities available, and many tourists stayed in Dubai as it was near Qatar. With Mukesh Ambani setting a trend in terms of buying a villa at a record-breaking price in 2022, the future of Dubai’s real estate market boom in UAE is set to experience strong growth in the future years. It is certain to resonate even with other adjoining countries in the region.
- When it comes to making instant purchases, many are opting for ready-to-move-in homes/residences/apartments/live-in spaces in the UAE real estate. On the other hand, off-plan real estate properties (recently announced projects or properties on the construction stage) are also selling like hotcakes. To attract buyers for off-plan projects, property developers are offering many incentives such as waived DLD charges, low EMI and flexible payment plans.
- Though the FIFA world cup has come to a close, another trend has caught the fancy of property developers. It is the demand for short-term rentals by tourists. The fever has caught on, with many property developers designing buildings and houses that favour short-term rental service packages.
- As per the World Economic Forum, the entire region of the UAE has got the second rank in the globe with regards to Global Safety Index. This factor, has no doubt, given rise to many reputed businessmen, buying properties of high value and then retiring for life in any of the UAE countries.
- Cryptocurrency has always held the limelight for a decade. Yes, popular crypto companies have closed shop with many customers losing their life savings and billions of dollars. The recent debacle of FTX and Sam Bankman-Fried being declared bankrupt has no doubt, switched favour for investing in real estate, especially in the UAE. Many HNWI have started to make real estate investments in the UAE as it guarantees potential profits, long-term stability and yes, generates a continuous passive income.
Conclusion
Until a few years back, UAE’s economy relied on only one source, the petroleum resources in the region. However, with real estate making a strong comeback, the industry is contributing one-third of the revenue to the overall economy. This aspect was responsible for the Government authorities to frame lenient real estate policies & procedures befitting the investors. The result – the real estate boom in the UAE is sure to remain for a long time.
Article by Sathya Narayana
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