Dubai topped in prime properties demand trend in 2021
The definition of prime properties varies from location to location. It generally encircles the areas which contain the top five percent of the market. According to “The Wealth Report 2021” issued by Knight Frank, Dubai has grabbed the second slot after London, but according to the demand trend for prime properties in 2021, Dubai topped among 22 cities in the world.
World’s Top Prime Properties:
London – 68,189
Dubai – 42,356
Sydney – 27, 436
Hong Kong SAR – 21,285
Singapore – 10,416
With 42,356 prime properties, Dubai stands at the second position after London, amongst the world’s other major cities.
Millionaires preferred home
During the pandemic, it was seen that there was a large number of shifting but it was just for a brief period of time. London and New York have topped the city wealth Index with the highest number of millionaires. Tokyo and Hong Kong get fourth and fifth position respectively. Dubai may not have topped the chart but has 536 Individual millionaires.
Dubai properties in near future:
In 2021, the expectation from 20 of the 22 cities is to see the prices remain flat or increase. A slight reversal of the trend was also seen in 2020 when we expected 9 cities to end the year with lower prices. So far as Dubai is concerned, demand, supply and sales volumes will have significant changes in 2021. As the report says, prime demand in Dubai will rise significantly in 2021, but prime supply will rise slightly and hence, the sales will also be in a slight rise trend. After the pandemic, Dubai is the only place among those 22 cities, having remarkable recovery in terms of property market. Even before the pandemic took its toll, UAE was nearing the end of the economic cycle, Covid-19 hit reset and 2021 could mark a wave of renewed growth. The widespread roll-out of an effective vaccine would be the biggest boost for economic recovery. With a potential for a quicker return to ‘normal’, this could limit unemployment and support housing markets, plus interest rates look set to remain low for the foreseeable future.
Trends to Monitor:
There are so many trends set to influence prime property market in 2021 and beyond-
The Blended City: With a five day commute a distant memory, and digital working being the new norm, there will be an online and offline approach to work and our lifestyles, leading to more residential stock in the city.
Digital Nomads: First Barbados, then Bahamas & now Dubai, policymakers are acknowledging the global workforce has gone mobile and are introducing short term visas in an effort to boost their pandemic-hit economies. We can expect more of this.
Accessible 2nd home: With many unable to reach their second homes in lockdown, and others decamping for much longer periods than usual, the location and specification of second homes is set to change, as many look for it within their reach.
EGI Agenda: Green and ethical investing (EGI) is set to filter all aspects of global property markets as the pandemic pushes purpose-led investment up the global agenda.
Debt harder to come by: With more countries expected to join the negative rates club in 2021, finance looks set to remain cheap, but lenders are taking a more cautionary stance, raising loan to value ratios and making finance costlier for highly leveraged clients.
Alternative sectors: From data centers to retirement homes and from healthcare to the private rented sector, investors are widening their net given the opportunities in the medium to long term.
Changing Tax Landscape: Will the government look to raise property taxes or will foreign buyer taxes and bans be rolled back to help attract overseas investment? The next few months will give clear indications on the same.
What our experts say:
Since Q4 2020, we are observing good growth in the mortgage books with all the regional lenders, also Dubai land department data shows that the pause in the real estate investment is now over. At present, we are experiencing the moment in the end user segment, especially town houses that range from small to mid segment groups. Sooner than later, we can expect increased demand in the apartment market, also as availability of townhouses are always limited in comparison to apartments.