Real estate experts expect property prices in the UAE to rise by up to 15% by the end of this year, with the potential to maintain these rates until the end of next year. They attribute this increase to ten factors led by the "Expo 2020 Dubai" and the "Fifty Projects," which will strongly support the UAE's economic recovery overall, particularly in the real estate sector. They explained to "Emirates Today" that the other eight factors include the introduction of new residency systems, increased international flights, successful vaccination campaigns against COVID-19 and a decline in infections, a recovering job market, the re-launch of some delayed real estate projects, a growing demand for purchases, and attracting more companies through fee reductions. They pointed out that rising construction material prices and the impact on supply lines for some raw materials will drive up the prices of the final real estate product.
Supporting Factors
In detail, Mohammed Khadr Al-Dah, Vice President of the Association of Structural Engineers in London and a real estate expert, stated that property prices in Dubai and the UAE as a whole are set to rise due to several supporting factors, notably the organization of "Expo 2020 Dubai" along with the significant revival accompanying the event's activities, attracting millions of tourists and investors from around the world to the UAE, particularly Dubai, during the six months of the event.
Al-Dah added that the increase in international flights, successful COVID-19 vaccination campaigns, a decrease in infections, and the recovery of the job market are all supportive factors for rising real estate prices in the country. He continued that other contributing factors include the re-launch of some delayed projects and the expansion of some companies, along with the return of residents from vacations and increasing demand for purchases or rentals.
He noted that prices have been low over the past three years, expecting that prices would rise in the upcoming period by 6 to 8%.
Continuing Increase
Meanwhile, the CEO of "Harbor Real Estate" and a lecturer at the Dubai Real Estate Institute, Muhannad Al-Wadiyah, projected that the price increase in the real estate sector in the UAE would continue during September until the end of the year due to several factors. The first is the Expo Dubai and its economic impact, along with the ongoing influx of visitors and population growth in Dubai, which would positively reflect on property demand while substantially absorbing the available inventory.
Al-Wadiyah explained that one of the key factors contributing to price increases and the recovery of the real estate market is the change in the mechanism for launching and approving new projects. Previously, to open an escrow account, investors needed to own land and have 20% to 30% of the project cost. Now it requires 50%, which makes it challenging for developers to launch new projects, thereby gradually reducing supply alongside increasing demand. He anticipated that the real estate market in the UAE would see price increases of around 7 to 8% until the end of this year, with the highest demand expected in the villa sector, as this type of property is the most sought after.
Attraction
For his part, Chairman of "W Capital Real Estate Brokerage," Walid Al-Zarouni, expected property prices in Dubai to rise between 10 to 15% due to various reasons, including the Expo 2020 and the granting of golden residencies, which he considers will drive prices up.
Al-Zarouni indicated that other factors would also contribute to rising property prices in the future, such as the "Fifty Projects," which include green residency and free residency. He pointed to several additional supporting factors, including increased international flights, successful vaccination campaigns against COVID-19, growing demand for purchases, and attracting companies through fee reductions.
Confirmed Increase
Furthermore, the General Manager of "Al-Liwan Al-Malaki Real Estate," Mohammed Harb Al-Falah, anticipated an assured increase in real estate prices during the remaining period of this year and into the next year. He projected a rise of 10 to 15% in prices for buying and selling while noting that the rental market would see increases of 10 to 20% during the period of the "Expo 2020 Dubai" until the end of the current year, as it would attract a significant number of visitors.
He highlighted other supporting factors for price increases, the most notable of which is the opening of international flight routes and investors' interest in the UAE due to fee reductions.
Continuing Rise
In line with this, the Chairman of "Al-Waleed Investment," Mohammed Al-Mutawaa, emphasized that all indicators in the real estate market confirm rising property prices in the UAE, predicting that prices will continue to increase, initially starting with the villa sector, followed by a rise in apartment prices.
Al-Mutawaa noted that "Expo 2020 Dubai" is one of the strong factors supporting price increases, alongside the removal of the negative impacts of the pandemic. He pointed out that confidence in the UAE and the stability of its economy, along with its success in managing the pandemic, have garnered investor trust, expecting an increase in demand for property purchases for ownership, as well as an active rental market that remains stable currently.
Minor Increases
The General Manager of "Fugur Path," Mohammed Al-Ali, considered that prices are currently experiencing minimal increases, stating, "this means that prices are high but reasonable, attributed to the control over the COVID-19 pandemic and its resulting negative impacts on the real estate sector."
He added that the market's stability reflects control over the pandemic, coinciding with the upcoming organization of "Expo Dubai," which is likely to enhance demand in the market, anticipating a surge in demand for ready investment units.
Relative Improvement
Additionally, the General Manager of "Al Habtoor Group," Ghaleeb bin Khirbash, expressed that the noticeable relative improvement in the real estate market indicates price stability while maintaining a balance between supply and demand. He noted that this balance supports the "Fifty Projects," which are expected to contribute to attracting investments and driving economic growth again, aiding recovery from the economic effects of the COVID-19 pandemic.
Bin Khirbash stated that the real estate sector would be among the biggest beneficiaries of these initiatives.
Construction Materials
In connection with this, the CEO of "Standard Property Management," Abdul Karim Al-Mulla, anticipated that the continued rise in construction material prices and the impact on supply chains for some raw materials would lead to increased prices of the final real estate product.
He mentioned that, alongside this, an increase in real estate demand would manifest in the local market in the upcoming period, coinciding with a considerable number of investors interested in living in the UAE, especially with the approach of "Expo 2020 Dubai."
Stability and Balance Between Supply and Demand
Real estate consultant Saleh Tabakh predicted stability in property prices in the UAE during the next year, considering it a very healthy and fruitful situation for the market, as current prices are at normal levels and achieving a good equation between selling price and rental value with excellent returns.
Tabakh said several factors support price stability in the upcoming period, including the large volume of supply expected to enter the market during 2022. He noted a renewed development movement due to increased demand with numerous reasons motivating developers to launch new projects.
He added, "We will enter a phase of positive stability with price increases in some areas, especially in waterfront areas, while achieving relative stability in the prices of properties under construction, and in secondary areas with an excellent balance between purchase price and rental value, as well as an increase in supply and development in areas like Dubai Land and Meydan, achieving a healthy balance between supply and demand."
The 10 Factors:
- "Expo 2020 Dubai."
- "Fifty Projects."
- Introduction of new residency systems.
- Increase in international flights.
- Success of vaccination campaigns and decrease in COVID-19 infections.
- Recovery of the job market.
- Re-launch of some delayed projects.
- Growing demand for purchases.
- Attraction of more companies through fee reductions.
- Rise in construction materials prices.
