As last year’s sales transactions broke preceding records and capital values mostly reached pre-pandemic levels, 2022 is projected to continue to see citywide price and rent increases but at lower yet healthier growth rates according to the market studies.
Data reflects a 140% growth in the number of properties sold from the first quarter of 2022 to the second quarter. We can see a jump in sales from a total of 201 to a total of 483 residential/commercial developments that are sold in Dubai for the second half of 2022. As the economy continuously improves, we can expect this to pick up further by the end of the year.
The comeback of Dubai’s luxury property market
The upper segment of the Dubai real estate market is making a continuous comeback as it doubled its market share in the second half of 2022 based on several reports from industry experts and analysts. It has been observed that high-end property investors are focusing on the capital appreciation of their properties rather than rental yields. The values of these properties are expected to appreciate by 30% or more in the coming years.
This implies that a luxury property, even if it is sold off plan, or still under construction is expected to appreciate its value over time. Hence, an investor can maximize his profit gains due to consistent capital appreciation.
Key factors that influence high-net-worth individuals to invest in Dubai
Dubai has set high standards among all more developed countries, on how they tackle the global health crisis. This is reflected through successful vaccination programs, the gradual opening of international borders, and competitive adaptation in business environments.
This gives a lot of confidence to the investors, resulting in the huge influx of high-net-worth individuals to make Dubai their primary and secondary home and invest in the real estate market particularly the upper segment or luxury properties.
Furthermore, the upper segment of the Dubai real estate market offers a highly competitive advantage in terms of pricing compared to other highly developed countries. For instance, waterfront or beachfront luxury property in Dubai appears to be relatively low in market value compared to most of the premier locations in other first-world countries.
As such, more high-net-worth individuals are inclined to invest in Dubai. This also results in to increase in demand for high-end properties. Hence, this explains why the value of these types of properties also increases to meet the current demand of the market.
Not to mention, a lot of initiatives from the government of Dubai related to visa reforms such as a 10-year golden visa for real estate investors with a minimum asset value of AED 2 million. They have also allowed and opened 100% business ownership to foreign investors and entrepreneurs just recently.
Lastly, a lot of investors perceive the Dubai real estate market as a hedge against inflation. This applies to all segments of the market from low to high-range segments.
