Ease in pandemic restrictions: Dubai real estate set to pick up growth momentum

The Dubai real estate looks set to regain growth momentum as the government eased most of the pandemic-related restrictions that will benefit tourism, aviation, hospitality, logistics and retail sectors, experts say.

Analysts, top executives and industry experts said property sector will be ultimate beneficiary of the ease in travel restrictions which were imposed to contain the Covid-19 pandemic. They said real estate sustained steady growth trend even during the pandemic and now it will pick up growth momentum as investors face no major restrictions to visit and invest in the UAE.

Haider Tuaima, director and head of Real Estate Research at ValuStrat, said real estate will sustain an upward trend as strong demand persists in the market.

"We can expect continued high momentum in relation to demand for end-user as well as investment properties in Dubai. The pandemic restrictions have not dampened the market as a record number of sales continued during the last 21 months. But this trend could change due to the rising cost of living, increasing mortgage rates, stronger US dollar, and anticipated new supply," Tuaima told Khaleej Times.

Latest data indicates that the Dubai real estate registered record sales during the first nine months of 2022 as investors and end-users rushed to purchase properties in the emirate.

“The total sales value exceeded Dh180 billion with more than 67,000 transactions during the January-September 2022, making it the largest sales value ever during the first nine months of the year. Previously, the emirate recorded Dh116 billion highest sales in the similar period in 2009,” according to the latest data by Dubai Land Department.

Bright prospects ahead

Imran Farooq, CEO of Samana Developer, said ease in Covid-related restrictions will further accelerate growth in the real estate sector.

"It's a moment as the world simply wants to forget about the pandemic and move on. No Covid limitation will encourage more travellers. More in-bound visitors and visitors means Dubai real estate will get a boost," Farooq told Khaleej Times.

David Abood, partner at real estate consultancy Core, said the strong momentum that the Dubai real estate market gained over early 2022 continues with robust growth witnessed across performance indicators for all asset classes.

"Transaction volumes continued to keep their upward trajectory with third quarter of 2022 recording the highest value of secondary market transactions concluded ever in a quarter and the second highest number of transactions till date.

"As we go back to pre-pandemic levels with travel, mobility, occupancy levels and regulations (particularly the recent announcement that masks are no longer required, with a few of exceptions) indicating a return to normalcy, we expect socio-economic sentiment to improve further," Abood told Khaleej Times.

HNWIs to lead

Ata Shobeiry, chief executive of Zoom Property, said Dubai property market has a history of showing great resilience to external factors. "There was a dip when the pandemic was at its peak in the region. However, thanks to the government policies, a successful vaccine drive, and incentives offered by developers, it picked up pieces quickly and has been cruising since then," Shobeiry said.

"And now, since the pandemic restrictions are officially over, the market will continue its upward trajectory. Many foreign investors and HNWIs have already shown interest in Dubai real estate, which is evident from the market’s performance in the last few months," he said.

Ayman Youssef, vice-president, Coldwell Banker, UAE, said travel and tourism contribute a substantial part of the GDP, and have a significant impact on various industry, business and economic aspects. Besides the fact that 10 per cent of employment comes from this industry which accounts for a noteworthy part of the population, the inflow of tourists, relaxed visa rules and increased business opportunities is bound to create an increased need for housing and real estate facilities.

"It is basically a ripple effect, opening up of travel and tourism will result in an influx of visitors, businessmen and investors leading to a better economic situation and increase in population. This will subsequently result in an increase in demand of real estate properties and will drive better pricing," he said.

Villa sales to dominate

Tuaima of ValuStrat said the villa segment will sustain strong demand in the post-Covid era.

"Villa and townhouse prices appreciated 52 per cent since the pandemic trough, but are still overall lower than the 2014 peak with exceptions in Palm Jumeirah and Emirates Hills where villa prices are now well above their 2014 highs. Demand is expected to continue to be strong particularly for larger, well-located homes, albeit at slower growth rates," he said.

— muzaffarrizvi@khaleejtimes.com