Dubai has become one of the world’s most appealing cities for real estate investment purposes. The market will remain popular in 2023 and beyond, as there are many properties available for purchase or rent. Zoom Property Insights reports that prices in Dubai will increase by 20 percent in 2023, while investments designated as “luxury properties” will rise by at least 13 percent in value.
An investor will have many options for a real estate investment in Dubai, including townhouses, apartments, flats, and traditional houses. But the assortment of properties available in Dubai is only a part of what will allow Dubai to stay popular for investment purposes.
More New Homes On the Market
The Dubai real estate market is expanding, and Dubai property investors now have more options to explore than ever. Alarabiya News states that Dubai had more than 45,000 new properties available for purchase in 2022. While this number sounds high, it’s also well below market demand. Expect prices to grow as potential investors begin offering more money for properties, as they’ll be willing to spend as much as necessary to enter this competitive field.
Prices for properties are expected to increase as the market grows, and these rises will persist even when the ongoing supply chain delays ease up. The supply chain will likely return to normal soon, thus resulting in more homes being made available in 2023 and 2024. The significant rise in property options in Dubai will produce a more competitive market with prices expected to rise further, so getting in on the market in 2023 may be a good idea.
Cash Buyers Will Make an Impact
One positive part of Dubai’s increasing rise in popularity for real estate investment involves how many people already investing in Dubai properties are cash buyers. Specifically, these investors have immediate funds to cover their purchases, as they won’t require loans. Buying properties with cash is one of the top property market trends around, as the overall cost to purchase a home will be reduced thanks to there being no interest payments or other loan-related charges being necessary.
The National News reports that nearly 70 percent of real estate purchases in Dubai and elsewhere around the UAE are from cash buyers. Only 22 percent of orders in the United States and around 30 percent in the United Kingdom are from cash buyers.
This point means that interest rate hikes aren’t as substantial in Dubai as they are elsewhere. While interest rates for property loans are increasing worldwide, their rate of rise is less prominent in the UAE because there are more cash buyers in the area. Since lenders are not dealing with as many obligations, it is possible for investors to find lower interest rates on loans in the area. But investors will still have to compare lenders to see what’s open and determine if the interest rates open to them are affordable enough.
But Will Interest Rates Still Make An Impact?
The rise in interest rates for home loans has been consistent worldwide, but the rise in Dubai hasn’t been as substantial. While many countries are seeing home loan rates rise by 3 or 4 percent, the UAE saw an interest rate increase of 1.75 percent for home loans in much of 2022.
The rise is concerning, especially since so many properties in the UAE are worth millions. But the influx of cash buyers is helping keep those rate hikes from becoming worse. This point makes Dubai more of an appealing option for real estate investments, as the interest costs are less intense than what people would spend elsewhere.
HNWIs are Moving To Dubai
Some people investing in properties in Dubai are among the wealthiest in the world. These high-net-worth individuals or HNWIs will likely bring in more investments in the region in 2023 and beyond.
An HNWI is an individual or group with at least $1 million in liquid assets. Many investors in Dubai are ultra-high-net-worth individuals or UHNWIs with $30 million or more in liquid assets.
Dubai currently has more than 67,000 millionaires living in the region. That total is expected to rise by at least 50 percent within the next ten years.
Dubai has not issued any restrictions on who can invest in the area, plus the government will not attempt to seize anyone’s assets. Residents also aren’t subject to income taxes, plus there are no Value Added Taxes on residential properties. These factors encourage many HNWIs and UHNWIs to consider investing in Dubai properties or moving to the area.
More Developers Reaching the Area
More developers will produce new properties throughout the Dubai region in 2023. The hotel industry has already grown in prominence in Dubai, with high-end brands like Ritz-Carlton, W, and Four Seasons opening properties in Dubai. These brands help to bolster Dubai’s reputation as a luxury market.
Individual real estate developers will likely join in and start producing properties of interest, including traditional houses and other non-rental properties. High-end luxury brands like Porsche, Elie Saab, and Bulgari are entering the real estate game by developing and designing new properties in Dubai.
The Central Dubai and New Dubai regions will be sites where these developers will work. Central Dubai goes from the Downtown region to Jumeirah 1, while New Dubai goes to the Dubai Marina and Jumeirah Lake Towers.
Is Dubai the Perfect Place For You?
It’s never been easier for people to invest in real estate properties in Dubai. The assortment of available properties is increasing, and the resolution of ongoing supply chain issues will only make the supply greater.
There’s also an increased variety of properties available around Dubai. An investor can buy a villa in Dubai, but studio apartments, flats, and townhouses are also available to order. Investors can find all these properties in various neighbourhoods around Dubai, from MBR City to Jumeirah Golf Estates to The Palm.
