As per the latest market analysis, it is expected that the property prices in Dubai are expected to witness a rise.
For the uninitiated, the Dubai real estate market was severely impacted due to the COVID-19. However, timely actions taken by the authorities and incentives offered by developers helped to stabilise it. Since the last few months, the market has been in the recovery phase. However, as per ValuStrat’s new analysis, prices in the residential sector can see an increase towards the end of the current year.
According to the 2021 forecast by the consultants, office capital values in Dubai are also projected to reach the lower level, before they would rise again. This bottom out level will be reached after a 10-year decrease. Similarly, rentals in shopping malls are also expected to face downward pressure. This is due to the growing trend of buying products online, which was further fuelled by the global pandemic. As people were prohibited from going outside, they had to resort to online means to buy products of daily use online.
Despite the growing dependency on the internet for shopping, ValuStrat’s report says that the shopping mall supply in the emirate for 2021 will witness a jump. It will be expanded to 2.2. million sq. ft. with the opening of new centres such as Dubai Hills Mall, Deira Mall, The Yard by Meraas and Avenues Mall. However, the trend of online shopping will also experience rapid growth. It will be retailers’ one of the primary strategic moves to maintain a robust e-commerce presence.
Apart from the property prices, the economy of the emirate is also expected to improve in 2021. However, these improvements and increments depend majorly on the fact that the health crisis is resolved. Furthermore, the much anticipated Dubai Expo-2020 will also play its part in improving the market and the economy as well. Furthermore, this year would also see the celebration of the golden jubilee of the UAE. This, too, is expected to help boost the market.
The analysis also predicts that rent and capital values in top villa communities in Dubai could stabilise. Furthermore, there are chances of witnessing a gradual appreciation as well. This can be due to the fact that most developers have put a hold on their new projects. After villas, apartments and studios could also follow suit by the end of the year.
Shedding light on the office market in Dubai, the report by ValuStrat says that the year will see the delivery of around 1.3 million sq. ft. of office space. Due to the new initiatives taken by the government such as the expansion of the 10-year golden visa scheme, visas for expat retirees etc. are speculated to attract a higher number of foreign professionals in the emirate. This can result in an increased demand for office spaces, and a step towards maintaining an equilibrium between demand and supply in the commercial property market.
Another thing that could boost foreign direct investment in the UAE is the reformations in the commercial companies’ law. As per the new law, there is no requirement for onshore companies anymore to have an Emirati shareholder. With the annulment of this requirement, setting up a business here wouldn’t be a challenging feat in the country. This will make way for more investment from foreign investors.
Lastly, it is also believed that after a tough 2020, there is an expected increase in the tourism sector as well. It is one of the many industries that suffered a major blow last year due to the travel restrictions imposed by many countries to prevent the virus spread. However, now that people are getting vaccinated and travel restrictions have been eased, the tourism sector will grow in 2021 and the hotel and hospitality industry is going to witness an upward trend.
With the opening of upcoming attractions such as the Museum of the Future, Ain Dubai and Zombie Apocalypse Park, hotels and resorts can also leverage this opportunity to target local vacationers.
The expected increase in prices calls for strategic investment plans. They can buy properties in Dubai now and sell them next year when the prices increase.