2022 began in a positive way for global property markets, as the COVID-19 panic had worn off and people had returned to their normal routines. They had no idea, however, that another curveball was on its way that would have an impact on their purchasing power. We’re talking about the impending recession, the impacts of which can already be seen in many areas of the world.
COVID-19 led many individuals to lose their employment, companies to close, and, as a result, there was a significant impact on buying power. In instance, the Dubai property market experienced a drop in prices and a lack of activity for a period of time. However, timely government steps and efforts given by development corporations aided a speedy recovery, and the Dubai property market is now back on its feet, delivering record-breaking statistics month after month.
What about the impending recession? Is it going to put a stop to the market’s impressive recovery? Or will the Dubai property market be unaffected? Everything is right here!
- Price Stabilization Strategy
The government has taken several steps to guarantee that the general public’s buying power is unaffected by the recent price increase and the impending recession. The most effective has to be the strategy of freezing the prices of up to 11,000 fundamental products. Milk, poultry, meat, bread, and so forth are examples. While this policy does not directly affect the real estate market, it will assist regulate the costs of essential necessities, resulting in a limited influence on the cost of living.
- Increase in the Real Estate Sector
As previously said, the Dubai property market heroically battled the worldwide pandemic, and the real estate industry has been on the increase since then. New developments have been launched, expatriate and investor-friendly regulations have attracted foreign investors, and flexible payment options are also enticing buyers and investors to purchase property in Dubai. According to current figures, the Dubai real estate market saw 30,903 transactions this year as of the end of May. Property prices have risen significantly, by roughly 11%. A further analysis indicates that the apartment sector has expanded by 9.6%, while villas have climbed by over 20%. During this time, not only has the cost of the property climbed, but so have the rents. Overall rentals increased by somewhat more than 19% in the market. Apartment rents in Dubai increased by 18.3 percent, while house rents increased by 24.3 percent. Similarly, demand for houses in Dubai has been increasing. And it is likely that this will continue in the future. GDP growth is another aspect that will assist the real estate industry and the economy as a whole to stay more stable. Experts predict that it will rise by roughly 6% this year, fueled by development in a variety of industries, including tourism, hospitality, and real estate, of course.
- Rise in the Number of Mortgage Purchasers
According to a recent Knight Frank research, mortgage purchasers for flats and homes account for around 18% of overall sales. This proportion has dropped from over 40% the previous year. This may appear to be a drop, but figures reveal that approximately AED 38 billion in financial mortgages were extended by the end of May this year. This indicates that the mortgage market is also cruising, and 2022 may take second place on the list of the greatest mortgage agreements completed in the previous five years.