Real estate in the UAE has experienced its strongest two years since the early 2000s, with factors such as the global COVID-19 pandemic and low USD interest rates transforming the market. Prices have been rising dramatically and supply has been unable to keep pace with demand.
As the vaccine rollout continues and measures such as lockdowns are being eased, prices in the UAE property market will continue to rise; according to Reuters, residential property prices in Dubai rose in April-June 2021 for a second straight quarter.
Ryan Mahoney (Dubai, UAE) is the CEO of Better Homes and the CEO and owner of CenCorp, both property-related businesses operating within Dubai.
Dubai is one of the most visited international destinations in the world; therefore, COVID-19 related disruptions to travel impacted the market as it did in other cities around the world. Lockdowns, social distancing and travel restrictions over the past 18 months have inevitably caused a slowdown in tourism. However, as restrictions begin to be lifted and travel becomes a possibility once more, tourists are starting to return to the emirate.
This is good news for the hotel industry, which has been operating back up to full capacity since the middle of May 2021. Pent-up demand has resulted in tourism numbers increasing more than expected since the end of lockdown.
Many investors are now seeking prime properties at a time when demand is outweighing supply.
In 2019 alone, more than 2.3 million people visited Dubai for business purposes.
The rise of flexible working, which began as a response to the pandemic, is also potentially good news for the hotel industry. With employees and employers alike recognizing the benefits of remote working, hotels offering business hubs and facilities may find themselves busier than ever before.
Short-Term Rental Growth
Increased numbers of visitors for both business and leisure purposes are forecast to drive sustainable growth in the short-term rental sector in Dubai. The implementation of new technologies will help to push this growth forward as people emerge from lockdown. Technologies such as online self-check-in and virtual viewings help travelers feel safer as their contact with others is minimized.
Increase in First-Time Buyers
In the first two months of 2021, first-time buyer sales across the UAE increased by 62% year-on-year. The rental market has also seen an influx of new contracts.
While it remains to be seen how the recovery phase post-vaccine will pan out, the signs look promising for the Dubai property market.