If anyone was looking for a tangible sign of Dubai’s resurgent, post-Covid property market beyond statistics and reports, then the images published this week showing queues of people lining up in the middle of the night to buy luxury homes on Palm Jebel Ali should be proof enough that the market is booming.
Speaking to The National, Matthew Solomon, sales team manager with estate agents Haus & Haus, said investors has been queuing since 3am on Wednesday. “The demand for these sorts of high-end properties is continuing to grow and grow,” he said. “The fact that a launch can cause so much frenzy says that the demand is still very high.”
Such sales indicate the strength of interest and momentum in a post-pandemic era. The emirate’s residential property market posted strong growth in August, with total sales up 37 per cent annually to Dh31.2 billion ($8.5 billion). Sales have gone hand in hand with continuing increases in residential rents. According to data published in the 2022 Residential Market Report by estate agents Betterhomes, there has been a large increase in apartment rents in several Dubai communities such as Downtown Dubai, Business Bay, Dubai Marina and Jumeirah Lakes Towers that all recorded growth in leasing prices of between 20 and 22 per cent. Villa communities witnessed an “incredible” increase in annual rents, with average prices rising by 56 percent to Dh428,019 ($116,500).
And there is little sign than this demand will cool in the short term. Thanks to its job opportunities, booming economy and high salaries, Dubai’s population passed 3.5 million last year, and with a major expansion of the city planned, the government's target is 5.8 million people by 2040. Both Dubai and Abu Dhabi have completed multi-billion property deals in the first half of this year, and The National has reported on companies that are on the hunt to recruit and retain real estate consultants, construction professionals, architectural designers and urban planners.
Of course, rising property prices are not unmitigated good news for everyone, and many people on more modest incomes need decent and affordable places to live. In addition, not everyone looks at property as an investment asset to buy and sell – most people want a home of their own.
The authorities have been aware of this need and have worked on careful regulation. In 2019, Dubai formed a higher committee for real estate, headed by First Deputy Ruler Sheikh Maktoum bin Mohammed, also Deputy Prime Minister and Minister of Finance, and senior property developers to strike a balance between supply and demand in the sector. In April this year, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, launched an international design competition for a “highly affordable, expandable, innovative and aesthetically pleasing house” that families could mortgage for Dh1 million.
Government incentives for foreign investors, and the strong promotion of tourism are paying off for a country that is experiencing population growth. But the mixed experience of property booms around the world reveals the importance of cautious steps to steering this growing sector, which the UAE has been taking. Sustainable growth and ambitious projects, in addition to providing homes and good regulation, are quite promising.