Is 2022 the year to buy a real estate property in Dubai?

The general consensus among experts is that while Dubai’s real estate recovery might still be ‘uneven’, 2022 is the year to buy property in Dubai.

Boom, bust… and boom?

In recent decades, Dubai’s volatile economy has been best encapsulated in the fluctuating fortunes of its real estate market. Exuberance gave way to large-scale correction in the wake of Global Financial Crisis in 2008, before an oil-price led boom and winning a historic bid to host Expo 2020 saw property values in Dubai soar again. As oil prices came crashing down in 2015, the Dubai real estate market entered a prolonged seven-year downturn that saw some property values decline by up to 50 per cent from 2008.

Property prices in Dubai were lowest at the height of the global pandemic in 2020 after the announcement that the opening of Expo 2020, like the Osaka 2020 Olympics in Japan, would be delayed. But the dip in prices was short-lived and could prove to be a generational property buying opportunity. Real estate investor sentiment in Dubai has improved considerably and prices have experienced a quick reversal as a result of the UAE’s swift and decisive economic and health and safety response which Bloomberg’s Covid-19 Resilience Rankings placed first in the world in November 2021.

A remarkable reversal

The year 2021 proved to be a milestone year for Dubai’s economic resilience. Economic activity accelerated in the run-up to the opening of Expo 2020 Dubai, the largest event ever held in both the UAE and the Middle East, Africa and South Asia region and the event has also seen the return of large numbers of international tourists and business visitors to the emirate, something many other global cities are still struggling to attract.

Dubai’s property market registered a remarkable 21% rise in the first 10 months of 2021 alone, and looks to have entered a new period of growth. Improved economic forecasts, a gradual reversion to a business-as-usual environment, the acceleration of economic diversification initiatives, and renewed efforts to return Dubai to its position as one of the world’s most visited cities, all bode well for sustained real estate demand.

New supply and an uneven recovery

Challenges to the Dubai’s real estate climate include new supply coming on to the market. Large swathes of Dubai are currently under development in Dubai South, Mohamed bin Rashed City, and Meydan, and new projects are coming online at a rapid pace in the soon to be prime real estate areas along Dubai Canal and Creek Harbour. 

The city’s real estate market also appears to have experienced a segmentation in fortunes in 2021 with Dubai’s prime real estate areas, including Jumeirah Beach Residences, Dubai Marina, JLT and Downtown Dubai experiences a faster rate of recovery and higher prices than more affordably priced segments of the market.

Longer-term outlook

The conclusion of Expo 2020 in March will also undoubtedly have a plateauing effect as excitement from the hosting of a major global event levels off. The end of the event will be followed by a typically slow Ramadan and summer period. A tightening global monetary policy tightening could also place some pressure on a nascent recovery in real estate prices as the cost of borrowing and mortgages in Dubai increases.

However, the longer-term outlook for Dubai property prices remains bright. The city’s real estate market cycle is emerging off what should be cyclical lows. Dubai’s population has also experienced phenomenal growth over the last 20 years and efforts to make it the most live-able, sustainable and ‘happiest city in the world’, will continue to attract more residents to its shores.

While new real estate supply will only begin tapering off after 2024, Dubai is developing a brand new airport in addition to one of the world’s largest airports at Dubai International Airport. Along with the Golden Visa initiative to attract highly skilled expats and their dependents, the city is experiencing a budding transformation – a transient population gaining a measure of permanency.

This suggests the possibility that population in the emirate could soon experience a dramatic expansion, which will undoubtedly translate into higher demand for properties.

We hope you found this article helpful. Are you considering buying a property in Dubai or Abu Dhabi?  For support in getting your mortgage, start your journey and get pre-approved today with Lenddoo, the most trusted mortgage broker in the UAE.