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HNWIs, visa reforms drive Dubai real estate market in 2022

Right now, it’s safe to say that the property market in Dubai has emerged triumphant, maintaining its reputation as a global real estate destination

The year 2022 started on a strong note for the Dubai property market. It had come out from the recovery phase that began in 2021 and navigated its way through many challenges, mainly the global recession. Right now, it’s safe to say that the property market in Dubai has emerged triumphant, maintaining its reputation as a global real estate destination.

The market has been at the forefront among various global destinations. However, things took a hit during the Covid-19 pandemic. It left lasting impacts on many industries. The Dubai property market, too, suffered a setback, but unlike other regions, it was back on its feet, and the numbers it produced in 2022 testify to this fact.

A record-breaking year

2022 proved to be a record-breaking year in more than one way. Month after month, it broke real estate records that were earlier considered untouchable. The start itself was record-breaking, with 20,539 transactions with Dh55.50 billion completed in the first quarter, making it the best quarter since 2010.

As the years progressed, more records were broken. The market for luxury homes, in particular, reigned the segment and is expected to continue to do so in 2023 as well. Statistics reveal that the price of luxury properties witnessed a growth of nearly 89 per cent between the third quarter of 2021 and the third quarter of 2022.

A report from Knight Frank predicts that the market for luxury properties will grow further in 2023 by 13.5 per cent. This is a record in itself, as no other global property market is expected to touch double digits.

The Expo effect

Among many other things, Expo 2020 helped Dubai gain momentum after the setback caused by the Covid-19 pandemic. It was a one-of-its-kind opportunity for Dubai to show the entire world that it has the capability to host a marquee event despite not-so-favourable circumstances. Tourists poured in, records were made, and the overall impact is there for all to see.

The site of Expo 2020 has now been transformed into The Expo City, which is attracting buyers, tenants, and entrepreneurs and contributing to the enormous success of the property market.

Visa reforms

A huge part of the success enjoyed by the Dubai property market can be (and should be) attributed to the authorities who have always tried to make it investor-friendly. 2022 saw an

influx of foreign investors and HNWIs venturing into the market, exploring options, and securing deals. Part of it was due to the visa reforms that took place this year.

The regulations and persecutes for Golden Visa were altered to better suit foreign investors. This saw many more investors entering the market, contributing to its growth. It also led long-term residents to buy properties in Dubai, which they were hesitant to do earllier because of future uncertainty. The Golden Visa boosted their confidence, and now many residents have become proud owners of properties in the emirate.

A haven for foreign investors, HNWIs

2022 saw the dominance of foreign investors and HNWIs as they secured maximum deals for luxury properties in various areas, Palm Jumeirah in particular.

It’s not that foreign investors and HWNIs do not have other options. The property markets of Miami, Los Angeles, Paris, NYC, and London have many enticing options for them. However, Dubai holds their maximum attention because of its strategic location, safety, visa reforms, and, most importantly, the security it offers. The fact that it’s a top-rated tourist destination also helps the cause.

Stable growth in the apartment and villa markets

The apartment market struggled for the most part of 2020; however, it was able to rise in 2021. The villa segment, on the other hand, dominated the market. 2022 saw both segments depicting stability. Growth in villas stayed mostly above the double-digit mark in terms of price growth. On the other hand, the apartment sector hovered around 9 per cent.

The stability in the market is a good omen for both buyers and sellers since it gives them confidence that their investment is safe, irrespective of the segment.

What’s in store for 2023?

The outlook for the Dubai property market for 2023 looks bright. The luxury market is all set to dominate again, apartment and villa segments will continue their growth, and the primary market is also expected to show more improvement.

Ata Shobeiry is the chief executive of Zoom Property. Views expressed are his own and do not reflect the newspaper's policy.