The global financial crisis and the real estate market in Dubai. What should buyers and investors prepare for?

Мировой финансовый кризис и рынок недвижимости в Дубае. К чему готовиться покупателям и инвесторам?

The dynamics of real estate prices remains the best indicator of the approaching crisis in the developed and developing economies of the world. Due to the characteristics inherent in various classes of foreign real estate in the UAE, in 2024, the sought-after real estate market in Dubai is primarily influenced. How this will affect the finances of buyers and investors, says the founder of the real estate agency “Floors” in Dubai, an expert in the field of real estate investment Danis Latypov.

How to save money in an economic recession 

Мировой финансовый кризис и рынок недвижимости в Дубае. К чему готовиться покупателям и инвесторам?

— In conditions of currency volatility and market volatility, the real estate market in Dubai remains the mainstay of stability. By investing in the Emirate’s facilities in 2024, you can:

1. Save your capital, as the investor is protected from the annual depreciation of the ruble. Plus, in terms of security and capabilities, Dubai is now the top location in the world, and people from all over the world continue to invest in it.

2. Earn money. Due to the decline in GDP and high taxes, investors began to actively withdraw their money from Europe and bring it to Dubai. Therefore, even in such a pre-crisis time, the UAE market, due to its economic and tax policy, attracts new capital.

How to safely invest in the UAE market

Real estate in Dubai is regulated at the state level, and fraudulent schemes are excluded here, for example, with the sale of a non-existent apartment or unfinished construction. Thanks to the escrow law, the developer is obliged to put part of the cost of the entire facility into the escrow account opened for the project even before the start of work.

It is impossible to use these funds for anything other than construction until the process is 100% complete. With the introduction of such regulation, the risks for the investor have significantly decreased, as well as the number of unfinished projects in Dubai. It is simply unprofitable for the developer to stretch the deadlines or “freeze” the construction site.

Among the options for a safe income in 2024 in the real estate market in the UAE can be considered:

  • purchase of housing for rent or resale;
  • purchase of housing for rent with subsequent resale;
  • purchase of commercial real estate;
  • purchase of apartments and villas for renovation and sale, or for rent;
  • purchase of land for the construction of various facilities.

What to consider when choosing profitable real estate

— Despite the wide possibilities of the market, you need to know where and what to buy. In 2024, the local real estate market is moving from a hot and active state to a more stable one. If last year investors mainly looked towards high-yield investment in real estate, now the priority has shifted to stability and potential growth of capital investments.

The average rental income in Dubai is about 8% per year, but in order to ensure the stability or growth of such indicators in 2024, two factors should be carefully studied when choosing profitable real estate:

  • First, the location. With proper selection, it will provide an opportunity to always receive a stable income, even if the global financial situation worsens. For example, near the coast, the tourist flow will not run out in any case.
  • Secondly, the entry point. It is necessary to buy as profitably as possible what will potentially grow. Thus, according to our estimates, the share of such facilities in 2024 is about 5% of all projects under construction in Dubai.

Dubai real estate – competent marketing or a profitable investment? We are dealing with the ROI indicator of the “golden” city. Analytics from REALTING

What awaits the UAE market in 2024-2025? Expert’s forecast

— In 2024 in Dubai and in The UAE as a whole predicts positive prospects for the development of the market — with the involvement of investors and tourists in ever-increasing volumes. Due to the steady demand for residential and commercial properties, as well as attractive investment returns on rental, the real estate market is expected to grow by about 15%.

A special role will be played by large investors who will continue to invest their fortunes in the elite sector of the UAE: prices for luxury villas on the local market in Dubai are still much more attractive than in the markets of competitors. Therefore, when in 2024-2025 facilities that were built and massively sold on the super-high market in 2021-2022 begin to be commissioned, overstocking is possible at some point, which will ensure market stabilization.

In the period from 2024 to 2026, real estate will not lose value, but such a high market as before is not expected — due to the huge number of purchase and sale transactions at the off-plan stage in 2022-2023. During the entry into the market of these new buildings, the supply will grow in avalanche-like leaps, and the demand will increase gradually. This ratio — when the supply is high, but not higher than demand — will adjust the growth rate of the real estate market.

Information provided by Etagi Real Estate LLC

Мировой финансовый кризис и рынок недвижимости в Дубае. К чему готовиться покупателям и инвесторам?

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