The biggest portal about international asset protection and diversification

The biggest portal about international asset protection and diversification

With Escalating Prices, Dubai Real Estate Sustains Robust Demand

The market of real estate properties in Dubai, the UAE, remains stable and dynamic. It is developing steadily, becoming more and more attractive to investors and private buyers. Some analysts predicted that after the United Arab Emirates was included in the FATF gray list (March 2022), large capital would leave the UAE, but that did not happen. The real estate market is actively growing. The conditional equilibrium point (meaning the approximately equal supply and demand) has not yet been reached, and it will not happen any time soon.

Dubai real estate market

In 2023, Dubai witnessed a remarkable surge in real estate development:  compared to the previous year, developers launched 30% more projects, totaling 41,000 against the prior 31,000. While it is plausible that some projects might not reach completion, given the thriving real estate market, the overall dynamics are undeniably impressive. Should this trend persist, it foretells a staggering 108% increase in operational real estate by 2025 compared to 2023.

Developers strategically target expats and digital nomads as key investors in “zero” housing. Unlike elite properties, this buyer demographic shows consistent interest in real estate catalogs, particularly favoring apartments with a well-balanced mix of consumer-friendly features. The expanding expat community in Dubai is certainly one of the reasons behind the growth of this market sector.

Statistical calculations indirectly corroborate developer enthusiasm. Predictions indicate a 2.5-fold increase in Dubai’s population by 2040, primarily comprising qualified professionals in various fields. Given their preference for quality living, developers’ proactive initiatives align with the anticipated demand, diverging from the notion of residing in hostels or budget accommodations.

A critical aspect revolves around the shifting investor focus towards “zero” real estate. The notable 47 thousand new housing transactions in 2023 underscore this trend, reaching a record-breaking total contract value of approximately 34 billion USD – a milestone within the past decade. 

Contrastingly, Dubai’s resale real estate sector is witnessing a slow but steady decline, evidenced by a significant 70% drop in transaction volume. Notably, just four years ago, the sales for new and secondary housing were nearly equivalent, highlighting the evolving landscape of Dubai’s real estate market.

The fact that investors are interested in Dubai’s primary market is well-grounded, given the emirate’s thriving economy, marked by a strategic shift away from oil dependence towards a focus on the financial sector, hi-tech industries, and logistics. These developments assure that investments in UAE real estate are poised to remain profitable over long time periods.

The popularity of developer-driven housing is exemplified by the fact that the most compelling and promising projects often secure investors even before reaching completion, with some projects not even making it into national catalogs. While such keen interest can sometimes lead to market overheating and the creation of potential issues termed “time bombs” by analysts, there are currently no indications of such trends in Dubai.

This conclusion gains support from a brief analysis of real estate prices in Dubai, particularly in highly sought-after areas like Jumeirah Bay Island, Palm Jumeirah, and Bluewaters. Over three years, the average price has nearly doubled, reflecting significant growth. For instance, in August 2020, a square meter of housing in these areas cost $5,200, and three years later, it surged to $10,500. A similar trend is observed with penthouses, where recent values have surpassed $10 million, even in the luxury real estate segment. 

We must note that in the first half of 2023 alone, luxury real estate transactions equaled the entire 2022, a remarkable achievement amid a Cold conflict with the FATF and diplomatic challenges with Russia. This resilience underscores the genuine prospects of the Dubai real estate market, signaling that the surge in investor interest is greater than the possible effects of cyclical fluctuations and represents a sustained upward trajectory.

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Megapolises with a negligible risk of a real estate bubble formation (score – no more than 0.5; The source of the data is the UBS Global Real Estate Bubble Index 2023):

  • Warsaw: –0.28;
  • Sao Paulo: 0.09;
  • Dubai: 0.14;
  • San Francisco: 0.27;
  • Boston: 0.34;
  • Madrid: 0.46;
  • Singapore: 0.47;
  • New York: 0.47;
  • Milan: 0.49.

Medium-risk megapolises:

  • Sydney: 0.67;
  • Paris: 0.73;
  • Stockholm: 0.74;
  • Amsterdam: 0.8;
  • Vancouver: 0.81;
  • Tel Aviv: 0.93;
  • London: 0.98;
  • Los Angeles: 1.03;
  • Geneva: 1.13;
  • Toronto: 1.21;
  • Hong Kong: 1.24;
  • Frankfurt: 1.27;
  • Munich: 1.35;
  • Miami: 1.38.

High-risk megapolises:

  • Tokyo: 1.65;
  • Zurich: 1.71.

Rosewater Creek Beach Residential Complex

The analysis of the real estate market in the Dubai Emirate is captivating even when performed independently of the investment plans on offer. A wide range of construction projects often get halted at the discussion stage, and not every promising idea gets practical implementation due to the high stakes involved. However, we’ve chosen to highlight an intriguing project as an example – the Rosewater residential complex at Creek Beach.

Rosewater Creek Beach Residential Complex

The primary rationale behind this selection is the relatively lower popularity of the Creek Harbor area compared to more renowned locations like Jumeirah Bay Island, Palm Jumeirah, and Bluewaters. While these areas are akin to prestigious European banks, diligently choosing their clients, Creek Harbor presents a unique opportunity. In contrast to anti-offshore trends that have made reputed banks cautious, the Dubai real estate market operates differently, making it challenging to find lucrative investment options in the most popular areas.

Creek Harbor exemplifies a relatively undiscovered area that has recently entered the international real estate market. Investors are just beginning to explore its potential. As a result, the prices remain at a mid-range level for now. However, it is anticipated that significant capital will soon recognize Creek Harbor’s advantages, leading to a potential surge in prices that might surpass the current leaders in the Dubai real estate market.

The standout feature of the project is its experienced developer, well-established in the Dubai real estate market – Emaar Properties. Known for its focus on premium housing, Emaar Properties chooses high-net-worth individuals and investors as its target client group. While the prices are reasonable, they may not be considered low, aligning with Emaar Properties’ goal of offering quality housing rather than focusing on affordability. Dubai Creek Harbor emerges as an attractive option for discerning buyers seeking a balance of prime location, thoughtful apartment design, and unwavering quality, filling a rare niche in Dubai’s zero-equity real estate sector.

Advantages of the residential complex:

  • pleasant, well-maintained area (Creek Beach);
  •  very high investment appeal;
  •  restricted private beach;
  • plans for Dubai city development include the construction of a metro line in the area by 2030;
  • management of Emaar Properties is considering the possibility of constructing the tallest tower, Creek Tower, which will further increase the investment attractiveness of the project;
  • own marina with marina;
  • 100% provision of infrastructure facilities;
  • estimated level of ROI (return on investment, return on investment) – 9.8% per annum.

The residential complex is scheduled for completion in the second quarter of 2025, marking the deadline for its commissioning. While the developer, Emaar Properties, hasn’t disclosed precise floor plans and design specifics for the apartments, potential buyers need not perceive their engagement as a risky or costly lottery. This assurance stems from the impeccable reputation that Emaar Properties has maintained in the real estate industry.

Typical apartments in Rosewater Creek Beach:

  • area – 66 m2;
  • one bedroom;
  • spacious enclosed balcony.

Approximate prices:

  • total investment – 1.51 million AED (411,100 USD);
  • stage 1 (after signing the contract) – 797,000 AED;
  • stage 2 (after commissioning) – 713,000 AED.

Area of separate rooms in the apartments:

  • living room – 4.4 m * 3.8 m;
  • kitchen – 4.4 m*3.1 m;
  • bathroom – 2.9 m*1.6 m;
  • bedroom – 3.8 m*3.3 m;
  • corridor – 2.2 m*1.1 m;
  • laundry – 1.6 m*1.1 m.

The apartments may not cater to all buyers, but it is important to note that this wasn’t the primary goal during the design and construction phases. Rosewater Creek Beach aligns exceptionally well with the preferences of its target audience. For those seeking additional features or customization, Emaar provides a range of enticing options to meet varied preferences and requirements.

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