New Look at the Investments in Real Estate of the UAE: Pandemia as a Catalyst for the Development of the Real Estate Market

12:13 am  |  18.12.2023

The COVID-19 pandemic had a significant impact on the real estate market in the UAE, resulting in dynamic growth across all housing segments, from economy to luxury. Investment attractiveness, wide business opportunities, the loyalty of legislation, and the availability of mortgage loans have become the main motivators for this growth.

The Evolution of Customer Motivation

In the past, the main motives for the acquisition of real estate in the UAE were reduced to successful investments and the desire to have a foreign residence. However, after the pandemic, the script changed. The open policy of the government in relation to foreign residents attracted investors from around the world. Factors such as safety, a comfortable climate, and high-quality educational institutions made the UAE attractive for personal residence.

Market Segmentation and Price Dynamics

Prices in the luxurious segment start from 5 million dirhams (approximately $1.4-$1.6 million). The question of the constant increase in prices in Dubai is becoming more and more relevant. The average real estate prices in the city increased by 20-25%, but in elite projects, growth exceeded 40%. Today, about 70% of customers buy real estate for a personal residence, emphasizing its status as a demanded investment.

There was a stable decrease in real estate prices for four to five years before the pandemic, despite constant demand. However, since the beginning of 2020, prices for high-end housing have increased by 100-150%, and in some cases even by 300%. This growth is attributed to an increase in demand and limited supply in this segment.

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The Dynamics of the Mortgage Market

The housing market revived due to the growth of mortgage loans in both the primary and secondary markets. In 2021, new records for the issuance of loans were set, including the acquisition of real estate in prestigious residences. This led to the readiness of buyers to overpay for facilities even at the construction stage.

Before the pandemic, the cost of housing in the UAE was much lower than in other world capitals. Currently, luxurious real estate prices are approaching the level of London, New York, and Paris.

Despite the periodic deficit of the proposal in the elite segment, the introduction of new projects in Dubai in the amount of more than 70-80 billion dirhams is expected, which will probably partially restore the balance between demand and supply.

Benefits of Investments: Expansion of Supply and Price Growth

Even with the expansion of supply and increasing real estate prices in Dubai, investments in this market remain promising. However, the success of investments depends on a thorough analysis and the choice of the right projects. Various strategies, such as resale and rent, can be successful, and investors should carefully consider all options.

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When buying real estate in the UAE, it is important to pay attention to the developer and the partner company participating in the transaction. Registration in the Dubai Land Department and the presence of an official license for the real estate agency are critical. When agreeing with the developer, the availability of escrow accounts, where all payments are received, is also an important aspect.

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Legal Nuances: Inheritance and Will

Registration of real estate inheritance rights is recommended to avoid possible difficulties. The design of the will becomes important, given that in the absence of such property, it can be inherited according to Sharia.

The pandemic has significantly improved the process of acquiring real estate remotely. Opportunities for online viewings have become more affordable, and the process often takes place without the presence of customers. The purchase procedure in the UAE is evaluated as one of the most convenient in the world, demanding a minimum time, sometimes only one or two days, to complete the transaction.

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It is important to emphasize that our experts are ready to provide comprehensive assistance in the process of acquiring real estate in the UAE. With their support, investors can count on effective strategies and a carefree experience of investing in the promising market of this region.

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