More Dubai residents likely to buy rather than rent: report – News

It noted that average rental prices for apartments will rise by about 25% in 2022 compared to 2021, while villa rents will rise by 26%

More Dubai residents may switch to buying homes instead of renting, a market report suggests.

“Consumer buying behavior is rapidly shifting toward longer-term investments, driven by a 25 percent surge in average market values, with tenants preferring ownership over rental properties,” said Property Finder in its latest annual Market Watch.

The number of lease contracts fell slightly by 5% last year, the report found.

“With rental prices rising over the last year, and historical premiums in some areas, owning a home has become a more viable option for residents,” said Madhav Dhar, co-founder and chief operating officer of ZāZEN Properties. The chances of earning good rental income or realizing capital appreciation in Dubai are higher than in most other globally renowned cities.”

The report states that compared with 2021, the average rental price of apartments will increase by about 25% in 2022, while that of villas will increase by 26%.

The Dubai rental market has changed over the past few years. Property prices have risen sharply due to an increase in the expatriate population as well as increased construction costs. On top of that, rates increased by about 3.4% in 2022 to 4.4% in December. Property prices are expected to rise even more in the future. This has driven the preference of Dubai residents to shift from renting to buying their own homes.

“We’ve noticed that some of our clients who come to us for rent end up buying when they realize they can easily put the rent back into their mortgage,” says Shabna Ibrahim from A1 properties.

According to the report, Dubai will continue to ride the waves in 2023. Property Finder’s UAE country manager, Scott Bond, said: “As we move into 2023, we’ve noticed a surge in demand, particularly with large deals and foreign investment flows in the last quarter, due to the huge progress we’ve made in 2022 We see bigger, better, brighter prospects for 2023.”

According to experts, there are several reasons why people prefer to shop in Dubai. One reason, says Jeff Kuruvilla, sales manager for Positive Properties, is the simplicity of the process. “Buying has become easier than ever,” he said. “Developers offer 1% payment plans, DLD waivers, and some even offer post-handover payment plans. If buyers can come up with 20% for a down payment, they can get financing for the remaining 80% from banks, depending on qualification.”

Dubai’s reputation as a safe place to invest has sparked another phenomenon – the influx of new foreign investors setting up base in Dubai, especially high net worth individuals (HNWI).

“Dubai real estate has emerged as an ideal investment for these new well-educated and well-traveled buyers due to the country’s world-class infrastructure, excellent amenities, business-friendly environment and easy living schemes. said Manav. “As a result, people are increasingly looking to make Dubai their primary residence. This is helping to boost demand for quality homes across the emirate.”

The results of Dubai’s bullish real estate market can be seen in luxury units, the report states. While apartment prices rose by almost 9%, house prices rose by almost 18%. All market peaks are broken in the fourth quarter of 2022.

According to Shabna, the luxury market has been booming, especially with the influx of wealthy individuals. “We’ve seen tremendous activity in that market,” she said. “Cash purchases in the UAE are among the highest among developing countries in the world.”

She acknowledged, however, that mid-market sales have slowed due to rising interest rates. “People are watching interest rates now to see where it’s going,” she said. “As a result, there’s been a slight slowdown in the housing market in the 3 million-unit range.”

The real estate market report shows that Business Bay, Downtown Dubai, Dubai Marina, Jumeirah Village Circle (JVC) and Palm Jumeirah are the top choices for those seeking to own an apartment, while Arabian Ranches, Arabian Ranches 2, Arabian Ranches 3, Dubai Hills Estate and Palm Jumeirah are popular destinations for investment or residence in the villa category in 2022.