The UAE’s real estate market demonstrates an unparalleled degree of resilience and vigor even amidst the global COVID-19 pandemic.
Market performance, along with proactive measures taken by the government, has resulted in the healthy resumption of commercial activities in the region.
Recently announced regulatory measures, local availability of the vaccine, and the upcoming Expo 2020 festivities are all opportunities to revive the UAE’s real estate market during 2021.
The current trends clearly indicate a positive year for the sector. Let us look at five reasons to invest in the United Arab Emirate’s lucrative real estate sector in the coming year.
Contents
Effective Pandemic Response
A decisive and pragmatic response against the pandemic from the authorities and the civil society, and the private sector has effectively outdone the negative externalities caused by the virus.
Four key reasons that drive people to relocate are macroeconomic stability, modern infrastructure, higher living standards, and economic policy consistency.
The UAE authorities have succeeded in limiting the ill-effects of the pandemic on these four factors. A high rate of vaccination has been a contributing factor to faster economic recovery.
Hence, financial advisors reiterate that the country’s real estate sector will continue to be as robust as it has ever been despite the slowdowns faced last year.
Focus on Innovation and Sustainability
Besides the immediate responses, long-term measures and the government’s proactive focus on developing a sustainable and diversified economy have caught the eye of investors across the globe.
A pleasant policy and taxation regime leave little room for ambiguity and decreasing dependence on oil, combined with the country’s strong economic fundamentals.
The UAE’s commitment to an open and free Middle East has also been proved by its recent normalization of relations with Israel.
By this, the government has implied that it is ready to keep aside historical tensions in favor of economic prosperity in the region.
The signing of the Abraham Accords offers numerous possibilities, such as joint ventures in the property and capital market.
Progressive Policies and Regulations
The recent historic decision of the UAE Government that offers citizenship to suitable foreigners is an important development for the country’s real estate segment.
The new policy, along with other associated policies like Golden Visa, which are introduced to lure in more talents who can add to the country’s development, will positively impact the real estate market with the subsequent entry of more prospective property investors.
The new historic legislation allowing full ownership of domestic companies by foreign nationals will also greatly enhance property’s desirability.
These progressive measures and an express and broad-based policy desire for a modern and sustainable economy will go a long way to retain the demand for real estate in the country.
A Thriving Tourism Sector
The tourism sector, a crucial driver of Dubai’s non-oil economy, is also driving the investments in the real estate market.
Almost 1.1 million tourists came to Dubai after the lockdown was lifted in July up until November last year, bringing the total number of visitors to enter the country to 4.9 million between January and November 2020.
The upcoming Expo 2020 Dubai is a vital contributor to the potential growth of Dubai’s real estate market this year, along with lots of opportunities it offers for the travel and tourism sector.
The erection of the mega projects within the Expo 2020 site ushers in multiple investment opportunities and prospects for residents interested in investing and renting properties.
Renters Opting to Become Owners
Reports have suggested that an increasing number of Dubai residents are shifting from being renters to first-time homeowners.
A range of factors has rekindled interest in owning a home during this time.
It includes lucrative property prices, lower mortgage rates, and a higher loan to value ratio where expats can borrow up to 80% of their property purchase price and up to 85% for UAE nationals.
The pandemic and the associated displacement faced by many people during the slowdown have also caused an increased demand for fully-owned properties in the country.
This increasing market transaction is driven by professionals and families seeking affordable homes conducive to residential and working lifestyles while building equity.
The persistent and surprising desirability of the market directly results from its unique value propositions and the country’s increasing emphasis on innovation and emerging technologies.
The United Arab Emirates have always held a prime position in being an attractive hub for trade and investment.
The real estate sector will retain its immense attractiveness in the coming years, even in the post-pandemic economic landscape.
References:
Global COVID-19 pandemic: https://www.who.int/emergencies/diseases/novel-coronavirus-2019
Macroeconomic stability: https://www.oecd.org/economy/growth/growth-policies-and-macroeconomic-stability.htm
AIX Investment Group: https://www.aixinvestment.com/
Investment opportunities: https://moneyconnexion.com/investment-opportunities.htm
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