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Dubai real estate market: A dynamic path to recovery since 2021

Here’s how Dubai’s real estate market has rebounded since 2021, driven by government policies, renewed influx of tourists, and a surge in transactions

Dubai real estate market

Since 2021, Dubai’s real estate market has been on a dynamic path to recovery. According to research conducted by BusinesStat analysts, this resurgence can be attributed to government policies that eased restrictions, allowing the country to swiftly overcome challenges. As borders reopened and the decline phase ended, the renewed influx of tourists played a pivotal role in fostering economic development and rekindling the interest of investors in the market.

In 2021, Dubai experienced a noteworthy surge with over 55,000 real estate transactions, accumulating a total value of over $36 billion. As a result, the Dubai Land Department reported a remarkable upswing in January 2022, witnessing a 75% increase in transactions compared to the same month in 2021, with the overall transaction value soaring by an impressive 145%. The momentum continued, as the third-quarter report of 2023 indicated a robust 22% annual growth in the number of buying and selling transactions.

Throughout 2022, approximately 31,000 residential properties reached completion in Dubai, setting the stage for an anticipated figure of around 47,000 units in 2023. This year marked the realisation of significant developments such as Me Do Re towers in JLT, Upside in Business Bay, and Prive Residence in Dubai Hills, among others. With keys now in hand, property owners are presented with the enticing opportunity to explore leasing options for their acquired assets.

“If we compare to a year ago, the number of apartments that property owners are leasing with our assistance has grown fourfold,” explains Ilnara Muzafyarova, the head of the company specialising in renting stylish homes with included services at Colife.

“If we look at January 2023, the growth is now threefold. In our view, this surge is attributed to the demand for property purchases a couple of years earlier. Investors approach us to lease out their property under our management. They bought real estate during the construction phase in 2020-2022, and having recently received the keys, they want to start earning rental income,” she continues.

“However, about 98% of Colife Invest clients purchase properties in the secondary market in already constructed towers. We immediately lease out such apartments, generating passive income for the owner within a month of purchase.”

Compared to 2021, rental prices in 2022 increased by 27%, and subsequently, the results of the first half of 2023 rental prices have risen by almost 23% year-on-year. By the end of 2023, this figure is expected to be around 30%. One of Colife’s properties, recently occupied by tenants, is a 1-bedroom apartment in the Palm Jumeirah area. The rent is $6,000 per month, which is 23.5% higher than the cost of similar properties a year ago.

The reasons for the growing demand for property purchase and subsequent leasing are quite understandable. Investors remain interested in the Dubai real estate market and acquire property that appreciates in value and generates passive rental income while being anywhere in the world. There are no observable reasons for a change in this trend.