Investors & Expats Return to Dubai’s Housing Market
The pandemic hit the economy hard in Dubai. Tourism accounts for about 11.5 per cent of Dubai’s GDP, compared with a Middle East average of 8.9 per cent, according to the World Travel and Tourism Council. Overnight visitors to Dubai fell from 16.7m in 2019 to 5.5m in 2020, according to government figures. Widespread lay-offs saw a number of expats, who comprise 92 per cent of Dubai’s population, according to Standard & Poor’s, and on whose labour the country relies, return home. S&P estimates that Dubai’s population fell 8.4 per cent last year. According to government data, the population grew by 1.6 per cent. “There is a clear step to invest expats more in the economy, rather than being a temporary resident in Dubai before returning to their homelands,” says Scott Livermore of Oxford Economics in Dubai. With the all-year-round appeal of the sun and the city’s shopping and hospitality scenes, which are now partially functioning again, Dubai’s appeal is growing. “Apart from people from South Asia, you will probably see investors from Israel and possibly snowbirds from Europe, as well as those who want to establish a family base that is not linked to a specific workplace – Dubai serves Europe and Asia really well. The average property price in Dubai is now 32 percent below the peak of 2014, although the last six months have been a small increase, according to data from Knight Frank. As in other world cities, the pandemic has increased the demand for larger homes and homes with outdoor space – and reduced it for smaller properties. The average price of a home sold for more than $ 1 million rose 5.3% in the three months to June, compared with a year earlier. Faisal Durrani, head of the Middle East research for Knight Frank in Dubai, says this is the result of the sale of villas and luxury apartments in the more prestigious neighborhoods, such as the Palm Jumeirah. The average price of a home sold for less than $ 1 million fell by 15.7 percent during the period. Rents are still falling in the meantime – by 5.9 percent in June. And the large number of new homes being built exceeds the demand of tenants who want to live in it, says Sapna Jagtiani, an analyst at S&P Global Ratings in Dubai. About 63,000 homes will be completed in Dubai this year, the highest number since 2009, according to Knight Frank.
Tags : INTERNATIONAL Investors Dubai housing market Expats Return