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Is the Dubai Property Market Going To Crash?

The Dubai Property Market has gone through cycles. We saw a significant peak in 2005. The peak resulted in a crash in 2008. The market recovered, and we reached an all-time high in 2014. The market again crashed in 2018. And once again, the property market has reached an all-time high in 2021.

According to an S&P analyst, the Dubai property market will bottom out in 2022. Reports that the city’s prices will fall and stabilize have been an excellent resource for those looking to buy or rent properties. However, those considering moving should not be concerned because housing prices are still relatively low.

Property prices are expected to grow by 2.5 percent in 2022, according to a recent survey of property analysts. The prices have grown from 1.1 percent and 2.8 percent respectively from the past three months ago. According to the poll, the Dubai residential property market will remain stable for the next several years, with a little increase in prices. On the one hand, this shows affordability, but on the other, it shows long-term growth and sustainability.

Apartments, which account for 85-90 percent, had a 6% price increase in the second quarter of 2021, according to data. Villa prices have risen as well, but apartment rentals have remained stagnant.

Informa’s Speller claims that there is no such thing as the property’s “correct” value. The only way to determine whether something is valuable is to see how much someone will pay for it. 

In other words, everyone has an opinion on what the “correct” value should be. Without people with opposing viewpoints trying new things to make progress, the world would never run smoothly.

The price of a residential apartment is likely to rise as people leave the rented properties to purchase their own homes. However, there are three outcomes to this trend: 

  • First, property values will fall because they are no longer an appealing investment. 
  • Second, young adults with limited financial resources are more interested than ever.
  • Third, higher sales rates and potentially lower costs per square foot due to increased demand.

Speller is well-versed, having organized Dubai’s most important property exhibition since 2009. Cityscape has long been regarded as the most accurate indicator of Dubai’s property market. 

The cityscape reflects the state of the industry. It reflects whether everything is going well or everyone is concerned about a flop. People frequently use Cityscape as one indicator they consider before making large investment decisions.

To keep the industry informed and connected, Cityscape has had to innovate. They have concentrated their efforts on finding solutions. The solutions include assisting investors with the transparency of real estate market information and value-added services.

Covid-19 is the ideal property storm. Communities are diversifying into other sectors to stay afloat as home prices increase. Since last year’s dramatic collapse, the luxury section of Dubai’s property market has gotten a life. 

Yet, the total recovery of real estate is still a long way off. For years, supply has surpassed demand for new houses and flats in a market where foreigners make up most of the population.

In the long run, the real estate market thinks that the success of recent government programmes will create a difference. These programmes are aimed at population growth. For example, new visas and more liberal social legislation, will determine the demand for residential homes.

The UAE’s property market has developed into more than just a “frontier”; it is now becoming an economy. Residential real estate is being developed as a “byproduct” of economic success. People are retiring here instead of discovering many opportunities.

The state of the economy has a significant impact on real estate. This will be another excellent opportunity for growth. Many retail and commercial space jobs will lead the way.

The current state of Covid has had a significant impact on future trends. People expect different things from their homes depending on where they live. This also depends on whether new construction projects inspire them to reinvest soon.

Last year, three major variables influenced the Dubai property market:

  • More international investors
  • Lower supply, especially in prime locations
  • Low-interest rates

Buying residential properties close to one another is one way to invest in Dubai during Covid-19. It is also considered an investment method during other natural disasters. If you own a home, work nearby, and go to school, this might make sense as an investment. 

People now look for different types of uses for their homes than they did in the past. People will always look to buy properties because of various amenities. But buyers also take great care when deciding where they want to live. 

Many factors could cause fluctuations in the Dubai market. It is safe to say that prices will level off after years of supply and demand imbalances. The Dubai Property Market has seen significant price fluctuations in recent years. 

The real estate market is poised for a pivotal year. Market circumstances are aligned in a manner they haven’t been in recent years, and there are several advantages to be had. At present, a city like Dubai, which provides up to three times the square footage for the same price, is an excellent option for property buyers and investors.

Dubai today boasts a favourable environment for property investment. Businesses are returning to their pre-Covid state. A number of new efforts to assist economic growth are on the way.

With an imbalance between supply and demand this year, the fluctuations are expected to calm down. The combination of increased supply in Dubai and increased short-term rentals will keep the market from collapsing. This explains why, despite the plentiful supply, housing in Dubai will stay inexpensive.

This is the best time to invest in the Dubai real estate market, considering the fact that the value will steadily increase by 2023-24. As markets continue to fluctuate, we can expect a spike or decline towards the end of this year, followed by a levelling off by 2022.

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