Dubai’s real estate market tanked with the sudden arrival of Covid-19, and such a sharp decline in property prices has not been seen since 2008. Despite this, and as a result of the strict measures implemented by the Emirati government, COVID-19 came under control in the United Arab Emirates, which instilled confidence among investors to invest in real estate and thus helped the market regain its activity again.
In this blog, we take a look at important developments in Dubai’s real estate sector.
Stake platform raises $4 million in seed funding
The stake is one of the largest financial technology and real estate investment platforms in the UAE, with the group recently raising $4 million with the help of angel investors and private equity firms.
According to the company, the funds will be used to accelerate growth by introducing innovative products, expanding the sales team, as well as sourcing properties.
Based out of the Dubai International Financial Centre, the Stake platform allows users to enter into Dubai properties starting from AED 2,000, and the platform may currently host properties from Downtown Dubai, Dubai Marina, and soon the Dubai International Financial Center and City Walk near Burj Khalifa.
Since its inception, Stake has grown with over 4,000 active users from 54 different countries.
Lots of offers and low demand
According to classical economics, when supply increases and demand decreases, prices fall. This has been the trend since the pandemic began last year. To get a fair idea, keep in mind that the glut in Dubai can only be compared to Buenos Aires, where cities are seeing a decline in high-end residential and commercial property values.
Although foreigners are turning to Dubai for luxury homes, demand has not been consistent and oversupply has seen values fall by more than a third since 2015. Job losses have led to people leaving and thus exacerbated the problem.
In general, the market has more characteristics than demand and this is why prices are lower.
Expo Dubai boom
Dubai Expo 2020, which was postponed last year, is expected to have a major impact on Dubai’s real estate landscape, and with enabling factors such as favorable interest and mortgage rates and a highly effective vaccination program, the real estate market is also expected to see a significant jump.
Another reason for the rise in real estate prices is the recent amendment in visa laws. These laws are music to the ears of investors who want to set up businesses in the metropolis.
As a result of the pandemic, contractors have faced challenges in arranging logistics and raw materials for construction, and as various industries open up, the gap between supply and demand will eventually end.
Rental prices elsewhere in the Emirates
For places like Sharjah and Ajman, both supply and prices are low, due to large exodus, and low-cost apartments are readily available.
For example, a studio apartment in the Al Nahda area can be rented for a price of up to 40 thousand. Some apartments reach a low rent of about 14 thousand.
There are homes available in Al Qadisiyah and Al Nasiriyah worth 500-700 thousand, and previously these properties started at more than one million UAE dirhams.
Overall, these are great times for people who want to invest in real estate in the UAE, and with the Dubai Expo just around the corner, investing in real estate can be a smart investment. For all the key insights and guidance on real estate investing in Dubai, book an appointment with us.