Real estate market of Dubai had some changes in 2017 which lead to its new trends and positions.
To understand what to expect from the Dubai real estate market in 2018, you need to take into account the changes that occurred in the industry in the past year, such as:
– an increase in the proportion of affordable housing and medium-price objects;
– increase supply in the primary market;
– stabilization of prices.
The market is becoming more mature Long-term investment requires stability, and the maturity of the market directly determines the interest of investors in its facilities. One of the main trends in 2017 was the increase in the share of affordable housing.
So, in the first quarter of the year, the first microdistrict with villas and townhouses of the middle price category appeared in the city – more than 1800 objects at the starting price of 1.6 million dirhams for a 3-room townhouse. The cost of renting starts from 130,000 dirhams a year.
In addition, the primary market also revived: almost 70% of the transactions made in 2017 represented the purchase of construction projects. Finally, prices stabilized. On average, the price decline in the market in the last quarter of the year did not exceed 0.5% compared to the previous quarter.
All this suggests that Dubai’s property market is more mature. However, there is reason for concern.
After the introduction of a 4 percent state duty to buy and sell real estate in the emirate and other measures, speculative activity came to naught, and did not appear for time. However, the increased demand for unfinished construction projects again attracted the attention of those who are not interested in long-term investments, but in quick profit.
According to research, between 2018 and 2020, developers of the emirate plan to bring to the market more than 90,000 new homes, which, without doubt, will attract the attention of speculators. Thus, in the near future the market expects new measures to contain such activity.
In 2017 various structures related to the Dubai real estate market presented innovative projects to the public – mobile applications, services, etc. Technological innovations are becoming an integral part of the market.
In particular, the Smart Crowd platform is already authorized by the Financial Services Regulatory and Supervision Authority, and investors will soon be able to invest in local real estate by this principle.
Changes in hotel industry
As Dubai strengthens its position as one of the leading tourist destinations of the planet, the hotel industry of the emirate is replenished with a variety of facilities. Today, the city’s guests can choose between standard hotel rooms, hotel-style apartments and resort lodgings for short periods.
Now in the UAE there is a construction boom, aimed in particular at the construction of new hotels and other objects of a similar purpose. Replenishment of the market with such alternatives will offer the best options for each category of visitors.
The review of the hotel real estate market in the emirate shows that in the next two years the construction will reach a peak, and the site will be replenished with 28,900 rooms. At the same time, the increasing demand for medium-priced hotels (3 and 4 stars) will allow them to compete successfully with luxury hotels. So, the diversification of the Dubai hotel offer mirrors the diversification of the guiding markets of its tourism industry.