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Dubai real estate and the reality of a booming economy

Mohammed Al-Hafiti

July 14, 2022

It is certain that the high rate of global inflation, and the decline in the economies of some countries as a result of the “Covid-19” pandemic, have negative consequences for the economy of other countries.

In addition, the geopolitical conflicts on the borders of Eastern Europe, which cast a shadow on the European economy on the one hand, and the Asian economy represented by China and its neighboring countries on the other hand.

However, it is necessary to shed light on the results of the measures taken by the UAE, which recovered from the “Covid-19” pandemic, through a series of continuous preventive measures, and therefore, the country opened the doors to work in all cases.

These measures have contributed to making the Dubai market one of the economically stable markets, in light of the diversity of the emirate.

Dubai's position as a suitable environment for investment, both locally and abroad, has also been strengthened, especially with the presence of privileges for investors that included tax exemption for companies, no restrictions on the exit of profits from investments abroad, the movement of capital and its easy movement, low energy costs, and secure movement and movement of goods to parts of the country. the whole world.

Oxford Economics statistics indicate that the gross domestic product (GDP) in both Dubai and Abu Dhabi will grow from five to 6% during the current year, and thus will witness a record growth and a quantum leap, as a number of mega projects have been launched across the country, which will be It has an impact in raising the standard of living and improving the lifestyle of residents.

It is also important to look at the link between the dirham and the dollar, which contributed to the unaffected real estate market in Dubai, as mortgage transactions continued to decline during last May, which indicates that the high volume of sales comes from buyers and “cash” investors.

This economic recovery is likely to have a direct impact on the continuation of the momentum in the real estate market in Dubai. Residential real estate prices are expected to rise in the emirate by between five and 7% in the main market, and between 12 and 15% in other regions during the second half of this year.

It must be noted that raising interest rates and its impact on buyers who use mortgages to transfer their purchases will not have a negative impact, as buyers represent only 18% of the residential market value in Dubai currently, compared to 40% last year, and more than 50% % in 2007.

Historically, real estate is a hedge and a safe investment haven from inflation waves, based on the principle that the income generated by investing in real estate tends to keep pace with consumer prices.

I believe that the real estate sector in Dubai can provide an opportunity to avoid the negative effects of inflation, but only if the supply and demand trends are favorable, and to seize the appropriate opportunities with good returns, and therefore the areas must be chosen carefully.

It is expected that the prices of residential real estate in the emirate will increase by between 5 and 7% in the main market, and between 12 and 15% in other areas during the second half of 2022.

 real estate consultant 

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