Review of the year 2021
The Dubai real estate market reached new record highs during 2021. After a slump at the beginning of the Covid pandemic, the market experienced a steep upswing. Dubai recorded its highest transaction value in 12 years, with property sales worth over 151 billion dirhams (i.e., approximately $41 billion). The total number of property transactions was also the highest since 2013 at 61,241, according to Property Finder, with nearly 60% of all transactions taking place in the secondary market and 40% in the off-plan market.
Dubai has definitely confirmed itself as a "safe haven" for many during the ongoing Corona pandemic. Thanks to a solid and stable government, Dubai was and still is a haven of normalcy. The government's efficient response to the pandemic, the rapid resumption of international air travel, and the Expo 2020, which was postponed by one year, increased Dubai's already existing attractiveness as an investment destination and as a primary as well as secondary residence.
With the Dubai Master Plan 2040 and the associated legislative reforms, Dubai continues to enjoy the confidence of the international investment community. This is noticeable through the settlement of international companies, which indirectly has a positive effect on the real estate market. Especially Europeans are looking for a second place of residence or even relocate their primary residence as well as company headquarters to Dubai.
As H.H. Skeikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, says:
"Dubai's robust infrastructure, flexible legislation that has kept pace with changing market conditions, and secure environment have helped boost investor confidence in the real estate sector. The rise in investment and increasing interest in Dubai from global investors is a testament to the effectiveness of the emirate's strategic economic initiatives aimed at strengthening its leadership position in various sectors and improving its global position in development indicators."
Looking ahead to 2022
The doors to Expo 2020 have been open for over 3 months now. Expo 2020 has been a huge success and visitor numbers have exploded. In the fourth quarter of 2021, hotel occupancy reached "pre-covid" levels. It will still be possible to visit the Expo until March 31, 2022. After that, the Expo site will most likely continue to be used as an innovation hub.
The real estate market has received a lot of tailwind from Expo 2020. After Expo 2020, we expect continued strong interest from foreign investors. We are convinced that the mood among investors will remain good and demand will increase. The price increases seen last year will most likely continue until the first half of 2022. The global inflation trend will then show whether the price spiral is heading upwards or slowing down again somewhat. It is certain that initial inflation expectations are already priced in today.
We are also positive about the end of the Corona pandemic. Over 93% of all vaccine-eligible individuals have already been administered two or three doses of vaccine. On the ground, the pandemic is hardly noticeable. Only the wearing of masks is reminiscent of the ongoing Corona pandemic. But since there are practically no other restrictions, Corona is no longer a major topic of discussion.
In this sense, we very much hope that soon the last measures will be lifted and we can dare the last step towards normality.