Investments in Dubai real estate will be less attractive in 2023
2023.01.15 08:39
Investments in Dubai real estate will be less attractive in 2023
By Ray Johnson
Budrigannews.com – According to one of the biggest real estate consultancies in the city, residential property prices in Dubai are expected to rise at a slower rate in 2023 after a record year with more than 60% more units sold.
According to Betterhomes group managing director Richard Waind, prices are expected to rise by about 5% this year, down from a 21 percent increase in 2021.
“The underlying demand has not been eliminated by (higher) interest rates. Waind stated, “But they are certainly having an impact on people’s willingness and ability to pay more for properties.” However, he also stated that the market has “taken rising rates and a strong dollar in their stride so far”
Due to the widespread use of cash for purchases, we are obviously less affected by interest rates in this area. Thus, cash transactions account for between 20% and 40% of all transactions in the United Kingdom and the United States. “It’s about 70% over here,” he added.
In 2020, Dubai’s real estate market exploded as it reopened before most major cities during the pandemic and as wealthy buyers snapped up luxury units, boosting a sector that had been slow since the oil price crash of 2014–15.
In 2022, Russians made up 15% of Betterhomes’ non-resident buyers, followed by Britons with 12%, Indians with 11%, Italians with 7%, and French with 4%. According to a Betterhomes report, Pakistan came in sixth, Lebanon came in seventh, China came eighth, the United States and Canada came ninth, and Kyrgyzstan came tenth.
After the war in Ukraine, a lot of Russians came to Dubai and bought homes in some of the most desirable parts of the city, like Downtown and Palm Jumeirah.
Indians were the most popular buyers among Dubai residents, followed by Britons, Russians, Italians, and Canadians. The majority of people living in the United Arab Emirates are foreigners.
“mainly due to a lack of supply, both in the ready and off-plan markets,” Betterhomes stated in the report, “villas, which led the start of the recovery in 2020,” saw only a 3% volume increase. Apartment sales increased 73% last year.
The industry, which experienced a property bubble burst in 2009-2010, which resulted in prices falling by more than half, has long been plagued by worries about excessive supply.
Betterhomes reports that 34,000 new units were added last year. Waind anticipates between 30,000 and 35,000 new units in 2023, citing “a lack of supply in this market with population growth” as his explanation.
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