Dubai real estate: What to expect in 2022
Real estate markets across the globe have witnessed their fair share of upturns and downturns since the pandemic outbreak. While many continue to witness volatility, a few global markets have seen prices bottom out and greater supply-demand balance. Fortunately, Dubai real estate was in the latter category. This status quo, accompanied by continued Expo-driven demand and multiple governmental real estate-focused initiatives, is expected to fuel new trends and sustain existing positives in 2022.
Will the residential property prices increase in Dubai?
Reuters met with several real estate analysts to conclude that, although the demand for properties will see a surge in 2022, the prices will rise only modestly. The study also suggests that this trend is expected to continue for two years. So, the current “affordability” in property markets could continue well beyond 2022. The Reuters study predicts the residential property prices to increase by 2.5% year-over-year. The prices are set to remain particularly steady in the multi-family residential segment, which has a direct bearing on urban housing parameters.
Upgrading to bigger houses
In the last year, a knee-jerk reaction to falling prices were property upgrades. Following an increase in work-from-home, people are looking for bigger houses with designated office spaces and value-centric amenities like gardens. High affordability incentivized people to upgrade, even if it meant moving to the suburbs. With remote working set to be the norm, and affordability expected to remain beyond 2022, the upgrading and “moving to the suburbs” trends are here to stay.
Although properties are more affordable, the majority of people are unable to buy them due to liquidity issues, owed largely to the pandemic-induced economic downturn. So, in the current low-liquidity environment, buyers could use non-traditional options. This is the rationale behind the rent-to-own schemes, wherein buyers pay monthly rentals which go towards homeownership after a pre-determined period, subject to conditions stipulated in the agreement. Rent-to-own schemes have several unique benefits, which are expected to find more takers in 2022.
What about renting/ owning commercial real estate?
The pandemic changed the overall perception of traditional workspaces. Although the dynamics between remote and office working are evolving still, there is a consensus that most organizations may move towards a hybrid model. It is also predicted that SMBs will prefer remote working, not requiring office spaces. This is expected to impact the CRE segment for the foreseeable future. Alternately, forward-thinking CRE owners are repurposing their facilities to tap into the burgeoning data centre market and warehousing opportunities due to meteoric growth in e-commerce. So, the CRE space is due to experience a shift that isn’t necessarily a downturn.
The single-family homes/villas/townhouses have seen high demand in 2021. This is expected to increase further, supported by upgrades and movements to the suburbs. With Golden Visa, Freelance Visa, and other initiatives in the UAE, foreign investors and expats are more likely to invest in 2022. This will also impact the market in terms of supply-demand balance, total sales, and reduction in older inventory.
However, the recovery in real estate continues to be tethered to pandemic management. So, with the Omicron variant on the rise, and the seemingly imminent third/fourth waves, the real estate sector’s road to recovery could hit a few bumps. In the UAE, the government’s proactive and methodical crisis management could be pivotal to the sector’s prospects, much like the previous COVID-19 cycles. The UAE has already approved booster doses from multiple vaccine producers, gearing up for what’s about to come. Such proactiveness could see the real estate sector move as predicted. https://middleeast.in-24.com/world/183724.html