As we move into a new year, Dubai property investors are searching for the most lucrative paths to follow. Loai Al Fakir, CEO of Provident Real Estate, assesses the landscape.
Having spent over a decade in the UAE property sector I have seen market cycles come and go. I opened my brokerage in 2008 and saw the investor bubble burst and witnessed the recovery just a few years later.
We have since moved from a largely unregulated market to one that is trending toward maturity and governed diligently by the Real Estate Regulatory Agency (RERA) with greater security for investors.
Developers have needed to become more competitive in pricing and payment plan offers in order to attract buyers. That is the current market reality.
Apartment sizes are trending closer to international norms and offering more manageable ticket sizes for the average wallet in the affordable and premium segments where we see most of the demand.
The townhouse segment has boomed since price and payment terms became too good to miss; I expect further launches in 2019 to continue this momentum.
Meanwhile, investors are increasingly opting for modern construction in new master communities with better transport integration, amenities, leisure and lifestyle benefits.
The luxury segment offers great affordability versus other leading world cities for high net worth individuals to make Dubai their playground. Prime units with the best views and plots continue to attract interest as investors recognise the future resale premium they command.
What could drive the demand in 2019?
Many analysts are forecasting an uptick in capital growth and rental yields leading up to and beyond Expo 2020; major capital investments in transport and infrastructure – and the exposure of Dubai to millions of Expo visitors – will benefit the emirate for decades to come.
Recently, we have also seen banks offering guaranteed or interest-free finance deals for Emaar off-plan property with a tremendous response from clients. Such actions from the banking sector will continue to open up the market to a wider audience and lead to more end-users stepping on to the home ownership ladder and investors expanding their portfolios.
In 2019, we will see Emaar’s Dubai Hills and Dubai Creek Harbour master developments begin handing over – offering entirely new community experiences. Investors who have been on the sidelines will be able to experience the quality of these communities for the first time and migrate from older developments.
Emaar Beachfront has proven over the last year to be a major new investment hotspot for international clients and Dubai residents seeking a prime beachside lifestyle. Further launches will continue the positive uptake as the community establishes its name.
New launches by Meraas on its iconic waterfront destinations La Mer, Jumeirah Bay Island and Bluewaters Island, have added a vibrancy to the Dubai coastline and elevated Dubai’s position for high-quality waterfront living on the world stage. The opening of Ain Dubai will also increase the exposure of Dubai by adding an internationally recognisable landmark to our skyline and further drive awareness and growth.
At the same time, demand for Madinat Jumeirah Living by Dubai Holding has been off the charts and I see it continuing to outpace supply.
Dubai is now the fourth most visited city in the world. Tourism growth continues to open up the emirate to new markets with more visitors coming, spending money, and choosing to stay.
Visa on arrival for Chinese nationals has provided a welcome boon to the market, and the largest China town opening in the Middle East in Dubai Creek Harbour will surely be a major catalyst for inward investment from the most populous nation.
Many investors are buying in tourist hotspots with a view to using their property as a holiday home and then letting on a short-term basis, so they can benefit from high rental yields and stay whenever they choose.
I am cautiously optimistic for 2019 and expect well-priced projects in great locations to offer an attractive investment opportunity.
Loai Al Fakir
CEO of Provident Real Estate
This article was first published in Prestige Vol. 38.