It has already been a smoking hot start of the year for us at Track Capital, with a huge influx of new clients kicking off 2022 with a bang.
I have always found that Quarter One is a time for investors to take stock of their finances and lay down new plans to achieve their goals for the year ahead. The buzz of activity is in the air right now, and we are excited to be doing everything we can to help you on your property journey.
Now, let’s take a look at all the headlines that caught our attention this week. I always try to summarise the links to save you having to click through.
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Property News This Week
- Dubai Rental Market Skyrockets 2022 – According to the head of Real Estate Research at Valustrat, residential rents in Dubai dropped a staggering average of 40% from the onset of the infamous 2015 market crash. 2015 saw the beginning of a 5-year low for the real estate sector, affected by drastic oversupply and worsened by the pandemic in 2020. However, last year a marked turnaround was recorded across the property market as Dubai made a spectacular recovery, with significant growth in property prices and a rise in rental values by 18.9%. This has resulted in higher average rents in 2021 than in both of the two years previous. Indeed, it seems that landlords may now seek to cut their contracts with low-paying tenants and swap them out for higher-paying ones. It is worth noting that the DLD has firm regulations in place to protect tenants from unscrupulous landlords, with long eviction notice periods, limits on rental increases and a mandatory 3 month notice period before rises come into play, keeping the rental market in check.
- Dubai Property Market Upward Trend to Continue this Year –
In its most recent Annual Transaction Report, the DLD has projected that the Dubai property sector 2022 will continue to see a rise in interest from core markets throughout Europe, Asia and the Middle East. This is expected to drive the already-building upward trend witnessed throughout 2021 as Dubai entered an unprecedented recovery from the pandemic and its previous long-term slump. With a host of new, government-backed projects coming up in 2022, even more transactions will likely be recorded this year. The report revealed that Dubai’s real estate market had recorded 84,772 transactions worth Dh300 billion in 2021. With constantly improving policies, infrastructure and government support, it really does seem there is nowhere to go but up.
- ‘Urban Plan 2040’ to Boost Dubai’s Mid-Price Properties – As has been seen in the past in other cities such as Manhattan, LA, Berlin and Paris, a knock-on effect of wealthy investors desiring high-end properties has been an exponential increase in demand, where undersupply of this type of housing creates a nearly-unburstable bubble of inflated house prices. This has a sharply limiting effect on the development of mid-price housing, with some cities like Manhattan being completely unable to break out of this pattern. With Dubai’s recent explosion in luxury house prices driven by foreign demand, it may appear that Dubai too will fall victim to this restrictive market trend. However, the government’s Urban Plan 2040 suggests they are preparing to take a different approach, focusing heavily on the development of mid-price housing to encourage more people into the city, which they know will inevitably drive wealth for the entire city.
- Prime Residential Units in Dubai Record 3rd Highest Growth 2021 – The Savills World Cities Prime Residential Index has reported that during the second half of 2021, prime residential units climbed by an average of 17.4% and their rental growth rose by approximately 25%, which was the highest rental growth seen over all of the 30 countries listed. The price growth of 17.4% ranked Dubai as the third-highest among the world’s top cities as increased interest from high-net-worth foreign investors resulted in demand outweighing supply. Factors for this turnaround include the competitive rates, which are still more affordable than other comparable properties in cities around the world, combined with the massive success of Dubai’s pandemic handling. Dubai’s prime market lag, when compared to its global counterparts, presents a clear opportunity for further price growth in 2022.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected] – if not, see you next week.