What expectations and predictions do you have regarding the Dubai real estate market outlook for 2021-2022?
The DLD recorded that in February 2021, Dubai had the highest number of secondary/ready sales in a single month since January 2017. The market is moving at an incredible rate and I predict it will continue into the near future with prices stabilizing before the end of the year.
The timeframe for Expo 2020 has changed. Now that we have a better idea of what the event will look like, what market predictions and trends do you expect to see?
I think that Expo 2020 will have a hugely positive effect on Dubai’s property market in years to come. The sheer volume of people that the Expo is estimated to attract will spark the interest of companies and professionals who may well see the benefit in setting up roots in the city. Captains of the industry may see Dubai as the perfect business hub to set up headquarters and entrepreneurs who are looking to start up new businesses, especially when the Expo site will be transformed into a business hub after the exhibition.
In my opinion, it is difficult to say whether Expo will have a direct impact on rental prices in neighbouring communities. There are so many factors influencing property prices that Expo won’t have any significant impact in the short term. Having said that, we have seen more interest being shown by multiple tenants when a well-priced, well looked after property becomes available. This may be a sign that prices may be on the upturn in the future but in 2021, I can’t see much of a change.
The metro link which has stops in communities such as Al Furjan and Jumeirah Golf Estates has piqued the interest of more tenants. For example, tenants registering their interest in Jumeirah Golf Estates rose by 30% from Q1 2020 to Q3 2020 after the announcement of the metro links in July 2020. The same can be seen in Al Furjan, an increase of tenants registering their interest in the community rose by 47% from Q1 2020 to Q1 2021.
The communities nearest to the Expo site although not on the metro line, communities such as Green Community, Mira, Town Square, Mudon, and Damac Hills are renting quickly and tenants are showing great interest in the properties. Green community is a very popular area and for some time now we have found that when a property becomes available, it is rented in record time. Expo 2020 is certainly having an impact on the popularity of these areas, however, I wouldn’t say that this is the only factor. These communities are offering properties at incredibly attractive prices, they’re new and perfect for families.
What long term predictions do you expect to see in terms of the impact of Dubai 2040 over the next 15-20 years?
Dubai's 2040 plan to be the best city to live in the world is incredible. Dubai is already a spectacular place to live, but to have leadership who consistently plan and execute betterment is hugely encouraging. The city has come a long way in such a short amount of time and has shown such quick forward-thinking leadership throughout the pandemic to keep residents safe and keep the economy on the right track.
As residents here in the UAE, we are very fortunate, and I believe things will only get better as time goes on. The 2040 plan is enticing for overseas property investors, entrepreneurs, and for expats already residing in Dubai. The city is becoming more and more of a home for everyone and a forever home at that.
Although 2040 seems a long way off, we can see that Dubai is continuously growing and looking for ways to improve the quality of life for its residents. Most recently, the introduction of the increase of LTV and lower interest rates as part of the stimulus programme. There has also been the introduction of dual citizenship, golden visas, remote working visas, 5-year visas, and retirement visas - all of which weren’t available prior to 2018. UAE leaders are making Dubai a very attractive city to live for expats.
As a result of building confidence from residents, the Dubai property market is sure to flourish as a result. Rentals will see an uptick from new arrivals and those on remote working visas and the sales market will continue to grow as families and individuals see themselves in the city for the long run. The commercial market will also benefit immensely as foreign business owners set up shops in Dubai either renting or buying commercial properties.
What are the big trends in terms of real estate technology that you are currently seeing, and what do you expect to increase in this field in the next 5-10 years?
Being pushed into a social distancing environment due to the pandemic has accelerated the real estate industry’s use of technology which will have a great long-term impact on the Dubai property market and we are already seeing this now. A number of properties have been sold after only a 360-degree tour or video tour. This is not only happening for clients who reside out with the UAE but is also becoming more popular with residents in the UAE.
For example, Allsopp & Allsopp recently sold a Lakes villa in Emirates Living to a family who was renting a villa in the same area. They had been in the market to buy for some time and when a property close by became available they were interested. However, the tenants were not comfortable with physical viewings, so we arranged a virtual tour of the property and showed the client. He decided to buy as it was the property they had been waiting for and was at a great price.
We are certainly seeing buyers and tenants viewing less. With virtual tours on many of the properties we see on property portals, buyers and tenants are using these to their advantage to save time. Virtual tours are a great way to save time and narrow down a property search - this is happening now, and I feel this will continue to happen as we move past the pandemic. Those looking for a new home are simplifying the process for themselves by ruling out areas and properties based on doing a bit of their own due diligence before they start the viewing process, so when it comes to physical viewings they have very few and it then turns into a shortlist rather than blindly viewing multiple properties in multiple areas.
Are you seeing an uptick in offices and retail spaces in 2021?
The commercial real estate market has been just as fast-paced as the residential market with start-up companies emerging, companies downsizing or upgrading and companies moving office location or buying commercial space rather than renting.
A combination of opportunity, uncertainty, circumstances people have found themselves in, and spending more time at home has made people rethink their careers and has given some the push to get into their own business and make a start. A few companies have been in contact with us to look for smaller office spaces, mainly because they have found that remote working has been beneficial to their business and they have decided to cut rental costs by moving to smaller premises. Unfortunately, during the pandemic, some companies have had to cease trading and their competitors are seeing this as an opportunity to expand their own business and take advantage of the potential new clients that are now available.
Allsopp & Allsopp have seen a rise in investors who are looking for commercial spaces after the pandemic. Commercial property offers investors a rental return of between 8-10% with a few properties offering even more. Residential investors are often not in the know about the high rental returns commercial property offers. We have had a number of cases where an investor has enquired about residential rental properties offering high rental returns and the residential agent has introduced them to the opportunities available in the commercial market and they have decided to invest in office spaces after seeing the yields available.
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