You can expect at least 50,000 new residential units to hit the market sometime in 2020 Developers have shifted their focus from high-end villas and luxury apartments to more affordable residential units
While no one can predict the real estate market, the supply of real estate in Dubai will likely hit an all-time new high this year. You can expect at least 50,000 new residential units to hit the market sometime in 2020; which means this year will set a precedent in terms of property prices and rental prices based on demand and supply. Keeping all these new developments in mind, here is what you should expect from Dubai's residential property market in 2020.
Demand for rental apartments
UAE is expecting over 20 million visitors during the six months of the Dubai Expo of 2020. While some visitors might choose to stay in hotels, most long-term visitors will opt to rent out apartments on a short-term lease. If you're looking for property for sale in Dubai, consider investing in buy to let properties. Although the monthly rentals may reduce due to the increased supply, there can still be a very high demand for rental properties. An investment in buy to let properties at this point could amount to a very high return on investment.
The tenants’ market
It is essential to keep in mind that due to the drastic increase in supply, the rental market will become a tenants market. Landlords need to ensure that their property is well-maintained, in a good neighbourhood, easily accessible and has all the modern facilities that a tenant will require. It is also advisable to hire property management services to boost occupancy.
A shift in developer interests
In recent months, developers have shifted their focus from high-end villas and luxury apartments to more affordable residential units. This shift aims to create more demand in the market by making housing more affordable. As this trend continues, more people will look to buy property as opposed to renting. According to Data Finder, there has been a 14 per cent rise in the volume of residential sales in this business year as compared to last year.
What is REST?
The Dubai Land Department is introducing a new smart platform, i.e. the Real Estate Self Transaction (REST). This digital platform will allow buyers and sellers, as well as landlord and tenants, to buy, sell and rent property online. REST will reduce the documentation required, hence making the whole process more efficient and cost-effective. With the launch of this platform, the buying and selling of real estate in Dubai will become much more comfortable.
More buyers enter the market
While the supply for real estate might be hitting a new high, the prices of real estate in Dubai are not. The reduction of property transaction fees from 4 per cent to 2 per cent will also lead to an increase in sales as well as a boost in buyer's confidence. Plus, with the upcoming Dubai Expo, it is expected that many visitors might decide to settle down or work in Dubai, which might also increase the demand for real estate.
Rise in off-plan property
More and more investors are looking to invest in off-plan properties in the UAE. As of now, areas like Jumeirah Village Circle, Dubai Marina, Jumeirah Lakes Towers and Downtown Dubai have been some of the most popular places for investing in off-plan properties. With developers coming up with various deferred payment plans and lucrative deals, investors are flocking to buy off-plan properties in Dubai.
The Golden Visa
The Golden Visa is a 10-year residency visa that the UAE government is offering to foreign investors, artists, engineers, doctors and even exceptional students. When the government first announced this scheme, over 6000 applicants applied for the Golden Visa in the first week itself. Once this scheme comes into play, you can expect the demand for real estate to rise due to substantial interest from foreign investors.
As long as the Dubai government continues to work on growth, development and infrastructure and introduces new regulations and initiatives, the confidence of the buyer will increase. As the spirit of the buyers grows, the Dubai real estate market will reach new heights. Local and foreign investors will take the big step of buying properties in Dubai to make their own homes, as buy to let properties, or even as financial investments.
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