Golden Visa, affordability will keep driving Dubai’s property market
08 August 2022 – GULF NEWS – www.gulfnews.com
Through the years, we have witnessed Dubai introduce a string of initiatives, encompassing simplified financing, low mortgage rates, and swift enactment of policies to further its dynamic economy.
Its leadership also played a pivotal role during the outbreak of the pandemic by setting prudent examples of how a global powerhouse can navigate dire challenges and protect the gains of its economy and the interests of stakeholders – which include local and international companies, SMEs, and homegrown enterprises – and paving the way for them to catapult their businesses to greater heights.
We saw overseas buyers flocking into the city to invest in the real estate market while resident-renters became first-time homeowners. This trend stemmed from a broad spectrum of benefits to trade, tech advancements, safety, and healthcare, which, in unison with the robust macroeconomic fundamentals, consolidated the emirate’s position as a global hub for businesses and tourism that never ceases to amaze.
That said, the latest expansion of the Golden Visa coverage will play a fundamental role in attracting overseas buyers and spurring demand for real estate projects.
A consumer-centric transformation
Understanding the shifting demographics related to global social and economic transformations help us make sense of the world we live in. The rise in migrations is indicative of a global economic resurgence and disproportionate rise in economic opportunities across competing geographies.
Capitalising on the rise in migration and talent-driven economic development, the UAE introduced a Golden Visa scheme for a wide array of exceptional individuals who meet certain eligibility parameters. The new visa scheme strengthens the UAE’s position as an ideal destination to live, work, and invest in.
With the surge in demand from property investors and resident homeowners, the Golden Visa scheme has been expanded to cover those who invest or purchase a secondary or off-plan property for Dh2 million.
The recently updated 10-year UAE Golden Visa regulations are a fantastic initiative to stimulate real estate investment even further, especially with the flexibility associated with the new rules, all of which will prompt residents as well as overseas RoI-chasing ‘hunters’ to invest in the country for the long term and allow non-residents to make the UAE their second home.
Facts behind the figures
The real estate market is at the outset of a pronounced upward trajectory. The market is still considered a buyers’ market, with undervalued real estate and prices in Dubai being more attractive than in other large metropolises.
Match buyer expectations to budgets
Affordability is a driving force to furthering the real estate market, according to the results of a poll conducted by Reuters. Housing prices in Dubai are expected to rise steadily over the next two years, driven by demand from foreign investors attracted to depressed prices of properties.
However, analysts caution that higher interest rates and a lack of affordable homes might curb the volume of deals to some extent. In terms of transaction volumes, Dubai’s real estate market recorded over Dh170 billion from January to June 2022. Sentiments in Dubai’s real estate sector have remained optimistic and reached an all-time high owing to new visa-related initiatives and regulations to attract foreign direct investments. A resultant surge in transaction values and volume in terms of rent and property sales is expected to continue momentum till the end of year.
Accept lower mortgage growth
We expect slower growth in mortgage transaction volumes due to interest rate hikes, which will be partly offset by favorable payment plans. While geopolitical tension is a primary risk, we expect Dubai will attract interest as a safe haven for wealthy individuals to establish their footprint.
Additionally, the supply-demand dynamics in Dubai’s real estate market has transformed significantly compared to how it used to be. This is largely due to the right kinds of units being offered, in terms of location, connectivity, amenities, build quality, and scenic views, which are seeing substantial demand and are selling out rapidly, despite the notion of oversupply.
Moreover, environmental, social, and governance standards will play an instrumental role in investment and purchasing decisions in the immediate future. Dubai’s gains in the transparency ranking, led by new regulations around market-leading practices, beneficial ownership tracking and sustainability reporting, and enhanced digital services will redefine the market and attract overseas buyers as well as new purchasing behavior patterns.
