As the economy is recovering from the global pandemic, property prices in Dubai have started rising in the last two quarters in 2021. With the country loosening the Covid restrictions, Dubai saw a surge in demand for housing. The real estate market fell, and the prevailing interest rate was low compared to standard times, which helped buyers to grab the opportunity. Consequently, the demand for residential apartments increased significantly, which boosted the growth of the overall construction industry.
Moreover, the construction market has witnessed a rise in the sale of properties in Expo 2020 Dubai. Buyers have bought thousands of apartments in Dubai from the start of the Expo 2020. Over 12 thousand properties worth more than AED 30 billion have been sold from October to November. This includes more than seven thousand secondary or ready residential units.
Apart from the Expo, government initiatives through new visa programs, better regulations for inviting foreign investments, loosening the COVID-19 restrictions, and the successful vaccinations are the parameters that indirectly helped the growth of the construction industry in Dubai.
On the other hand, the rental market in Dubai has witnessed 3% and 6% rise in rents for apartments and villas, respectively. This can be attributed to the pandemic induced remote working and increased demand for spacious apartments.
Though apartment prices dropped during the pandemic, in some popular areas of the emirate, the rent rose by 20%. Since housing rent has been increasing, new constructions may start to gain from the opportunity. From all these factors, it can be estimated that demand for new residential constructions will witness substantial growth in the next four to six quarters.
