- March 20, 2023
- Posted by: Waqas Siddiqui
- Category: Real Estate
Key Factors Influencing Real Estate Sector Growth in Dubai
Dubai’s real estate sector witnessed significant growth during 2022 and 2023 will be even better. The property sector in Dubai saw an estimated 76.5% increase in sales. The best off-plan properties in Dubai saw the highest increase of 144%. The uptick in property purchases is likely to continue in 2023 as well. Currently, Dubai has over 115,000 units under construction of which 34,000 are 70% complete and will be handed over by the end of 2023.
Despite the ongoing economic instability in Europe, the UAE’s real estate sector is performing well. This could be attributed to the UAEs demographic. Over 30% of the UAEs population is aged between 20-30 and nearly 90% of them prefer renting. Some of them also have plans to invest in affordable off-plan properties and have been saving for investments. Last year Mo’asher published a report also suggesting a significant growth in Dubai’s rental index and sales prices.
The recently concluded FIFA World Cup in Qatar also contributed to the growth of Dubai’s real estate sector. The global High Net Worth Individuals (HNWIs) were among the major attendees and transited via Dubai for the event. The international travelers transiting through Dubai were able to have a better understanding of what the city offers and the reason for its global recognition.
Several factors conjuring the growth of the real estate sector include installment options, high-rental yields, and compliance. Likewise, some developers are selling off plan properties at a very low down payment of 10%. This reduces the financial strain on investors and makes it an attractive investment option. Moreover, the steady inflow of expatriates ensures strong demand for rentals, guaranteeing a 5% return annually on the investment. Lastly, RERA’s (Dubai’s Real Estate Regulatory Authority) regulations protect investors from project delays or cancellations.
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Dubai is doing its best to implement best practices in the real estate market. Therefore, it is a major factor in attracting foreign direct investment (FDI) in Dubai’s real estate market. In the first half of 2022, Dubai witnessed FDI inflows of AED 13.72bn in H1 2022, reflecting a growth of 14.6% compared to 2021. Rated as the best marketing research company in Dubai, we understand that global investors are keen to invest in the Emirates.
Furthermore, the Urban Master Plan 2040 aims to make Dubai an eco & pedestrian-friendly city. The plan also includes initiatives to achieve sustainable urban development. This means that residents can reach their destinations within 20 minutes on foot or by bicycle.