Should I Invest in Dubai Real Estate in 2018?

Dubai in 2018 – Q1

Dubai real estate and property market has seen some turbulent times in the recent past. The beginning of 2018 has been a testing one for Dubai real estate as the movement has been slow compared to the previous years.

There are many reasons that experts have been pointing out for the same. It includes over supply, world market conditions and a tentative sentiment towards real estate investment in Dubai.

As per the latest numbers that have been shared by Dubai Land Department (DLD), around 13,759 real estate deals worth 58 billion AED have been done in the first quarter of 2018. During the same period in the year 2017, Dubai saw more than 20,000 real estate deals that amounted to 77 billion AED which means that there has been a drop of approximately 25% in terms of value and approximately 31% in terms of real estate deal volume in Dubai.

Real estate investment – A high value proposition

Real estate investments and property transactions are high valued exercises and even a slight volatility in the markets tend to create tentativeness in a person’s decision making. There are many investors and property buyers who usually defer their decisions to buy and go into a “shell” till the market shows positive signs again. Generally, anyone would like to avoid blocking too much capital and putting the same at risk. This usually affects real estate transactions in any given market and is applicable to global real estate market too.

In a global city like Dubai with so much attention and micro level analysis the sensitivity towards any change, any dip, any negative news tends to get amplified and the market reaction is usually very fast unlike many other markets.

Dubai property on a positive move

However, the good news is that real estate is very much back on track in Dubai with some major infrastructure developments happening in this region leading the bounce back.

Major individual real estate investors in Dubai are of course Arabs and also many of them are from India, Pakistan and England. The real estate sector in Dubai has always been a favorite for the above nationalities as there are many citizens from these countries who have made Dubai their homes. They know the strong underlying stability that this beautiful global city offers and have experienced Dubai growth firsthand.

Dubai is also unique in the sense that almost the entire world invests in Dubai real estate. There are investors and real estate buyers from more than 216 countries who have invested in the Dubai property market. This factor stands testimonial to the fact that investors have made good returns on their real estate investment in Dubai and this also makes Dubai an exclusive & forever attractive real estate investment zone.

In spite of all the challenges surrounding it, Dubai real estate market and property sector has been growing positively. The reason for the same is that everyone believes that Dubai is a stable market with a a lot factors that could boost their investments in the short term as well as the long term.

Dubai property investment numbers – Q1 2018

Dubai saw a lot of real estate activities with GCC investors being involved in more than two thousand five hundred real estate transactions amounting to more than Six billion AED.  Other Arab investors were involved in more than 1220 property transactions costing around 2 billion AED. Foreign investors were involved in a whopping 5000 plus real estate transactions which was approximately worth around 10 billion AED.

Dubai property investment in terms of nationalities – Q1 2018

Emiratis – more than 1500 realty transactions – 4 billion AED approx.

Indians – more than 1500 property transactions – clocking 3 billion AED approx.

Saudis – clocked around 1.2 billion AED with other nationalities like Pakistani, the British, Chinese, Egyptian, Russian, Jordanian and Canadian all making a significant contribution towards Dubai real estate investment.

Dubai properties – a positive outlook

Many real estate experts in Dubai and also globally strongly believe that the numbers and figures reflected through the DLD registrations indicate a very healthy movement forward for Dubai real estate in the 2nd half of 2018 and also through 2019.

Real estate analysts say that there are multiple factors that are fuelling this strong belief in Dubai real estate growth. The positive policies adopted by the Dubai government, the amazing number of infrastructure projects that are being carried out rapidly and effectively to welcome Expo 2020 and of course the all important factor that Dubai continues to shine as tourist destination, shopping destination, trade destination and as a major hub for literally everything across the world.

Focus on affordable & mid-market segment

Dubai is well known for its grandeur and real estate in Dubai is no different. However apart from luxury homes in Dubai, many real estate developers have quickly realized the need to address a very strong and real segment within this market – the middle class & affordable segment. Possibly for the very first time, we are seeing a concerted effort from some of the top names in the Dubai real estate development circle who are developing affordable homes in Dubai.

We are staring at some very affordable & attractive prices for first-time buyers and property investors in Dubai especially in communities like Jumeirah Beach Residence, Jumeirah Village Circle and the growing communities in Dubai South, ahead of the exciting Expo 2020.

This indicates that the Dubai’s real estate market has matured and it is not all about the glitz and the glamour. There are good, reasonable, affordable real estate deals available in Dubai in 2018 and it is the right to capitalize for every investor.

Yes, you should invest in Dubai real estate in 2018 & beyond.

A few obvious reasons are listed below:

  1. Dubai is still growing and growing fast.
  2. Dubai real estate will keep attracting investment in real estate as the return on investment is still very high both in terms of capital as well rental yields.
  3. Many Dubai property investments still give you 15-20 per cent upon handover, when as an investor you have made less than 50 per cent of the property value.
  4. Higher rental yield that translates to higher return on investment.
  5. Strong connectivity with the rest of the world.
  6. Free repatriation of capital and profits.
  7. Strong regulatory regime that protects investment and a growth-driven leadership.
  8. The new segment in focus – affordable and mid-market will continue to drive real estate transactions in terms of volumes in Dubai.

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