13-year high: Reasons behind record property transactions in Dubai
Dubai has long had a sought-after real estate market, which, in turn, became an important contributor to the economy of the UAE, accounting for around 5% of the GDP. Of late, the market has been outperforming itself due to major highs in transactions and rents. In fact, property transactions are breaking records, with the first half of 2022 turning out to be the best performance ever. Sales have topped at AED 114.51 billion(1).
There are several reasons for this happy turn of events, but first, some statistics: The Dubai real estate market recorded AED 22.7 billion in sales in June 2022, the highest sales figures in the past 13 years. As per the Dubai Land Department, the market reached almost 71% of the total 2021 sales volume in just six months. And from the look of it, the upturn is set to continue for the foreseeable future.
Why property transactions are breaking records
Firstly, there is a lot of transparency in land dealings, with the government making sure that records are digitized and associated activities, such as loan disbursal, registration of property deals, information about property ownership, the fair market value of a property, and so forth, are easily accessible online.
The enhanced digital services and data provision processes, such as service charge management, automated valuation, and transaction databases through the Dubai Real Estate Self Transaction (Dubai REST) platform have greatly helped ease the process of buying and selling property in Dubai.
Besides, the government’s investor-friendly policies have attracted local and global property buyers in droves. Increasingly, investors from around the world are buying into the Emirate’s real estate, adding to the demand for properties.
What is really commendable is that, in spite of the pandemic, the property market has continued to grow. The government of the UAE deserves kudos for having handled the COVID-19 crisis effectively. The UAE’s response to the crisis has been acknowledged and lauded by the entire world and especially the residents. The healthcare industry, in particular, has done an excellent job in tackling the unprecedented challenge through timely caregiving and successful vaccination drives.
While economies across the world were reeling under the pandemic pressures, the UAE not only managed the crisis effectively but also ensured that sectors such as real estate aren’t neglected. It recognised the need to improve the transparency in the property markets — which enabled both developers and investors to invest without concerns.
The recent updates to the UAE Golden Visa law have also had a positive impact on the real estate sector and property transactions. The new rules offer flexibility to property buyers in terms of investment. In fact, the government policies encourage non-residents to make the UAE their second home.
It’s not for nothing that the real estate markets of Dubai and Abu Dhabi have been recognized as the top global improvers in 2022 in the latest Global Real Estate Transparency Index (GRETI)(2), which is an important indicator used for cross-border investment. Dubai rose three spots in the index to 31st position globally and is the only property market in the MENA region to feature in the ‘Transparent’ tier. But such distinctions are largely par for the course, considering the governmental efforts have been significant in the sector in recent years. The best part is that the apex bodies, without resting on their laurels, continue to induce greater efficiencies in the sector.