THE 2021: A PROPERTY UPROAR IN DUBAI
The 2021: A property uproar in Dubai
You may not have realized it yet, but a home might be the most affordable asset right now specially in Dubai. Dubai’s residential market rebounded strongly in the 3rd quarter of this year, rising 50% over the previous 3 months. This trend of increasing affordability is likely to continue in the upcoming year, as improved desire for bigger homes, Personal liberation laws & new visas sees transactions pick up into sales in 2021. With more time spent at home during pandemic, buyers have been looking for bigger properties with more space, where they can afford it.
Actually covid-19 has replaced investors with end-users as the major sources of demand. End users have shown an inclination towards townhouse and villa products which is evident in the transaction volumes.
Dubai’s residential real estate market will present opportunities next year despite a slowdown in 2020, according to the founder of a mortgage-investment platform. “If you come in at the lows, then you’ll make money at the highs & end user will be benefitted,” said Rajinder, the CEO & founder of Money Maestro. Money Maestro has leveraged their 18 years of experience in Dubai’s real estate and financial markets. Moreover, during Covid-19 pandemic, UAE Government acts swiftly to overcome. That is why, IMF expects real GDP to grow 1.3% in 2021. Major steps of UAE are-
1. Expo 2020 were moved to next year
Expo 2020 now expected in between Oct’21 to March’22. With this delay, further hopes will be put into the Expo, and cement its theme of ‘Creating the Future’. With 25 million visitors expected and more than 192 participating countries, the estimation for the contribution to the economy was around 122 billion AED, and more than 50 thousand job opportunities. These numbers will play a role in refreshing the market, creating more demand for residential projects and make Dubai a global destination for residences.
2. Property transfers processes were moved online
The Dubai Land Department (DLD) even launched a real estate self-transaction (REST) to facilitate quicker and more efficient means of processing real estate transactions. The DLD hopes that the institution of such digital platforms would increase transparency in the Dubai property market.
3. Stimulus packages totalling 18% of GDP
To soften the economic impact, the country’s stimulus measures are worth around 256 billion AED ($69.70 billion). Banks can now increase their exposure to real estate to 30% from 20%, while minimum loan-to-value ratios for mortgages will rise by 5% points to 80% for foreigners and 85% for nationals.
4. An updated bankruptcy law
In 2016, the UAE cabinet approved the federal bankruptcy law. The law reduced the risks of doing business in the country, allowing businessmen to avoid time in jail if their companies fail to pay debts.Earlier this year in August, Sheikh Mohammed issued a new law to regulate family-owned businesses in Dubai. The law included provisions to tenure of ownership, wealth distribution, and the role of government entities in the formation of family-owned enterprises.
5. Several sharia-linked laws were also relaxed
UAE announced some days back a major overhaul of the country’s Islamic personal laws, allowing unmarried couples to cohabitate, loosening alcohol restrictions, attempting suicide decriminalised and criminalizing so-called “honour killings.” in a country where expatriates outnumber citizens nearly 9 to 1, the amendments reflects the changing profile to attract business in coming years.
6. Several new residence visas have been announced
Various pre-pandemic reforms, including the introduction of so-called ‘golden card’ permanent visas for wealthy expats and highly skilled foreign workers had helped bolster sentiment. With expats making up over 80% of the overall population, this move will not only help create a sense of security, but will also impact real estate in a positive manner. The new retirement visa will also support a long-term view and encourage people to consider retiring in UAE.
The tax heaven for home buyers:
Dubai is already beginning to recover in terms of demand and the wider UAE will flourish post-pandemic is just not only because of dynamic & decisive leadership but the absence of property tax here. It may well encourage high net worth individuals, entrepreneurs and businesses to consider relocating to Dubai to take advantage of tax-free property environment and quality of life. Across the globe, Dubai came 2nd on the list after Hong Kong, at 53%, when it came to the addition of new residential supply for 2020 and so on. The number of new homes forecast for completion in Dubai this year is 50,700 units, marking an increase of 40%.