My whole life, I’ve been surrounded by the real estate sector. Coming from a family of successful property developers, it has been a massive presence in my life ever since I can remember. It’s hardly surprising, therefore, that I took on my role at DAMAC and later launched my own proptech venture.
And I’m in good company, too; real estate is one of the UAE’s leading industries. It makes up around 5.5% of the UAE’s overall GDP and is a fast-paced and varied industry in which to work.
The current state of real estate
The UAE is an attractive location for buyers and investors alike. Its relatively young real estate sector makes it excellent value compared to other international cities. In fact, market research carried out by global real estate consultants Knight Frank found that Dubai is set to be the lead city in the world for residential property price growth. It’s not by a close margin, either. Dubai is expected to see a total increase of 13.5% in 2023, ahead of cities like Miami and Dublin, which are predicted to grow by just 5%. It seems our market is definitely getting something right.
Buyers here have access to some of the most luxurious and high-end properties, but there is much more to gain for investors. Unlike other countries, the UAE doesn’t enforce personal income tax or capital gains tax which is a great incentive and attracts more high-net-worth individuals to the nation.
What’s more, the UAE’s social and political stability ensures security for any investments. This, combined with our growing economy and the sheer volume of properties available, will feed into a healthy return on investment (ROI) for investors in our property market. In short, now is a good time to think about making that property purchase.
A record-breaking industry
In 2022, Dubai alone saw record-breaking figures in the real estate sector thanks to increased prices, transactions and a successful post-pandemic recovery. The emirate witnessed US$72.2 billion in real estate sales, a 61% year-on-year increase. Its booming year for uber-luxury property saw a total of 219 homes sold at a value of US$10 million throughout 2022 – another record we can be proud of in Dubai!
What’s in store for this year?
The UAE’s population is growing due to our nation, and more specifically Dubai, being among the most desirable locations to live in worldwide. A growing population means increased demand for property which will naturally lead to more sales across the nation.
Prices within the sector continue to rise, and while not record-breaking like in 2022, Dubai has already seen a 5% rise in property prices this year. Real estate values, however, are predicted to increase more slowly in our nation’s capital during 2023. There are numerous reasons for this, such as the rising interest rates anticipated later this year, which could dissuade some buyers from seeking out mortgages. But for me, the year is still young, the market is still growing, and I think there is plenty of potential to make a successful investment.
So, what does it mean?
The year ahead looks promising for those of us involved in real estate. Attention and interest from high-net-worth individuals mean that luxury properties will continue to command hefty price tags throughout 2023. The UAE’s stable economy and excellent infrastructure are drawing in more and more millionaires looking for high-end, luxury living in a safe and stable country. And, thanks to our unique real estate options and growing market, it seems to me they’re spoilt for choice.
As real estate prices continue to rise, now’s a good time to make that property investment. And if you’ve already put your money into our real estate market, you can be assured demand will continue to grow as Dubai’s population is set to almost double by 2040. In short, this means it’s wise to stick around if you really want to get the most from your investment.
While no one can ever be certain what the future holds, all indications suggest that the UAE’s property market will remain resilient, attract investors and continue to play a key role in the wider economy. I, for one, am looking forward to what the rest of this year will bring.