In recent years, Dubai‘s real estate market has witnessed significant development, setting remarkable records that have given rise to both positive and negative myths.
Sales in new developments in Dubai declined by 30% in September of the previous year. Pessimists began speculating about a potential “soap bubble,” while optimists viewed it as a mere stabilization after a period of excitement. According to the Dubai Land Department (DLD) report, more than 118,000 real estate transactions were concluded in the first nine months of 2023, totaling AED 359 billion, representing an increase of 33.8% and 36.7%, respectively, compared to the same period last year. While these figures may not match the impressive growth seen in 2022, with a 62% increase in the number of deals and a 78% surge in total value, they do not indicate a cooling market or diminishing demand.
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Presently, over 77,800 apartments and villas are under construction in Dubai, and almost all of them are finding buyers. However, prices are increasing at a slower pace, a natural progression. During the third quarter of 2023, the average cost per square meter rose by approximately 5%, yet remains significantly below the peak values of the mid-2010s.
Not all properties under construction in Dubai turn into lucrative investments after a 30% payment. For maximum benefit, consider super-luxury segment properties or new master districts with developed infrastructure. Master districts, taking 5–10 years to build, promise stable price increases. It’s crucial to purchase property in one of the first houses and conduct a comparative analysis to assess the area’s profitability.
Russian buyers, though prominent in the second half of 2022, lost their dominance to the British and Indians in the first quarter of 2023. Dubai’s market always attracts customers globally. Top 3 buyers in 2023: India, UK, France.
The UBS Group Global Property Index deems Dubai a city with undervalued real estate. Prices start at $150,000 for a 30–35 sq. m. studio. Buyers can take advantage of interest-free installments for the entire construction period, including amenities such as a swimming pool, gym, and parking.
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The Abu Dhabi market is dynamically developing, with a 363% increase in foreign investment in the first half of 2023. Prices are lower, and the one-time land tax is 2%. Investors are also turning to Ras Al Khaimah, where the largest casino in the United Arab Emirates will open in 2027.
The UAE provides favorable conditions for foreign buyers, including interest-free installments and the opportunity to take out a mortgage. Investments are made in a stable currency – dirhams pegged to the dollar.
Resident visas apply to spouses and children, and a variety of international schools with different educational programs make Dubai an attractive destination for families.
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Investors should take into account the key trends characterizing the real estate market in 2023. Currently, most properties from developers are launched with higher prices compared to those resold by owners. What are the reasons for this phenomenon? Take, for example, the new Emaar Beachfront area in Dubai, where the original homes were available at a lower price. As a result, during resale, you can find options with prices 30% lower, often with earlier completion dates or already ready to move in. All new projects from developers launched now will be completed in 2027–2028.
However, many investors prefer to buy new buildings from developers due to a simpler and clearer booking system, as well as convenient installment plans, where the down payment is often only 10–20%. Are there profitable options? Yes, if you analyze the proposals and compare several developers and locations. It is important to consider not only the prices per square meter in different areas but also to study the successful and unsuccessful cases of individual developers and assess the potential of each location. In other words, to make the right investment, you need to conduct an in-depth analysis of the market or seek advice from an experienced professional who has spent many years studying the market and its features in detail.
