Expo still on track to boost Dubai property market, real estate data expert says
Beginning his career in real estate in 2006, Haider Tuaima witnessed the major changes in that of Dubai real estate market.
Mr. Tuaima, 55, has lived in Dubai for over 20 years. Currently responsible for real estate research at one of the leading consultancy and consultancy firms in the Middle East, ValuStrat, Mr. Tuaima provides data-driven market insight to help his clients and beyond make informed decisions. .
While the Dubai property market has been through a lot lately, including years of falling prices, the seasoned property researcher said favorable government policies, buyer-friendly mortgage rates and a trend towards working from home. caused by the pandemic have helped put the city’s real estate market on the path to recovery.
Despite some uncertainties, Mr Tuaima believes the outlook for Dubai’s prime real estate in 2022 could be very positive with a successful Dubai World Expo. As the long-awaited mega event, which was postponed due to last year’s pandemic, is set to begin in October, the city expects more foreign investment and possibly the return of international homebuyers. which were a major force behind the rise of the city. -final market.
Mansion Global recently sat down with the Dubai-based real estate expert to find out how the Covid-19 pandemic and the delayed World’s Fair impacted the city and what the real estate market will look like in the post-COVID era.
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Mansion Global: Why is ValuStrat famous?
Haider Tuaima: We are not developers, we are not brokers, we provide market research.
One of my responsibilities is to create an index for the market and to try to set the market direction for the UAE and the region.
In general, 90% of the population [in Dubai] is very transient, so people are leaving and new people will come, so the real estate market here is very difficult to assess. This is where my job comes in because you need a dedicated team to understand and try to measure where the market is heading.
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MG: How has the Covid-19 impacted the Dubai real estate market?
HT: Before Covid, in late 2019 and early 2020, the market thought everything was going to be positive in 2020.
Then the Covid happened. Basically we got locked out; the Expo was postponed and market sentiment was hit hard. At least 90% of the market has been hit hard.
We no longer have international investors entering the country because their countries were stranded. Domestic buyers inside thought they might lose their jobs because of Covid, and people have been made redundant because of it. So it has become very complicated and a very uncertain market.
Transaction activity was at an all time high for the second quarter of 2020, so we hit the low in 2020. Between the 2014 peak and the 2020 low, the Dubai real estate market lost around 40% of its value.
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MG: Has the city bounced back from the Covid shock?
HT: We definitely hit rock bottom last year, and now we are seeing very good growth.
Properties have become so affordable that they have become buying opportunities for many. In addition to this, banks have started offering higher loans to securities. So before, we were capped at 75% of the maximum loan-to-value ratio, which rose to 85% for first-time homebuyers. At the same time, the government stepped in and tried to strike a balance between supply and demand.
The UAE has also rolled out possibly the most ambitious immunization programs, so the country is now truly coming back.
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MG: What types of properties are most in demand in Dubai today and how has this changed over the years?
HT: Right now, I think there is a trend happening all over the world, not just in the UAE, which is [homebuyers are] move to larger spaces. There is also a migration out of the city center.
Over the past six to nine months, there has been a focus on villa and townhouse transactions as people seek larger spaces rather than sitting in an apartment when working from home.
A few years ago, the off-plan market was more concentrated. Thus, about three quarters, perhaps two thirds of real estate investments were intended for the off-plan market, that is to say properties that have not yet been built.
When the government stepped in, we now have less. So now the market has shifted to the majority of investments towards existing properties. The advantage of older and existing properties is that in general, for the same budget, older ones offer larger spaces compared to those built more recently.
MG: Who’s buying in Dubai now?
HT: Most of the current demand comes from domestic investors, especially in the high-end sector.
MG: Why are foreign buyers interested in Dubai and when will they come back to the market?
HT: The safety and security here is top notch. The whole city is a 24 hour city, and it’s very, very safe, so people are drawn to safety.
Also, the majority of us speak English and speak many languages, most of us speak more than one language. So whoever comes here from wherever they are, whatever part of the world, Dubai might not be home, but at least there is a support system where you won’t be a stranger and you will see people from all over the world.
The Expo is coming in a few months. Hopefully the borders will open up for other countries to come to this country, which means we will have investors from outside, not just domestic investors.
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MG: What is the future of the Dubai real estate market?
HT: Now that we have hit the bottom we start to grow taller and the growth will be gradual which is healthy.
The growth has been very gradual because we have a lot of offers coming up, especially in the apartment sector. It will take a long time for all of these units to be absorbed. I think it will be healthy growth in the future.
We expect that by the middle of next year we will see accelerated growth and so far that is definitely happening. Month after month, we see the difference.
MG: If you were to buy property in Dubai, what would your dream home look like?
HT: It should be at ground level. I always wanted to have a place where I could wash my own car in a covered garage. I want the house to have a garden with flower beds and trees.
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