In 2023 we have seen more tenants become homeowners. A high return on investment, increase in immigration into the city, along with rising salaries and property appreciation are only some of the many factors that influence their decision.
Dubai has witnessed an unprecedented demand in the property market, driven by both residents and foreigners alike. Although foreigners are dominating the sales, residents are quickly turning from tenants to buyers.
Transitioning from tenant to buyer has its advantages. Owning your property eliminates the necessity of paying rent, you become a landlord yourself and can invest the acquired capital from renting out your home into buying more property in Dubai.
Here are a few reasons why tenants are transitioning into property ownership in Dubai.
Rise in Population
With a rising population, Dubai’s property market demand continues to increase year-on-year. Population on the city reached 3.62 million in August. It is worth noting that many of the immigrants are high net-worth individuals seeking to expand their investment portfolio with high yielding assets. In 2022, the UAE attracted 5,200 millionaires, this year, the country is projected to attract another 4,500 high net-worth investors. It is safe to say that it is the right time to own property and put it on the market to maximise your return on investment. The high influx of immigrants continues to affect demand for leasing apartments, hence why many residents are opting for buying property in Dubai and making the most out of their investment with the current rates in the rental market.
New Property Developments
More projects are launched in Dubai by the developers to capitalise the high demand Dubai’s property market has experienced. Over 32,000 residential properties in Dubai, including villas and apartments, will be handed over this year, according to real estate consultancy Asteco’s first-quarter 2023 report. This figure reflects a stable supply of new units to satisfy rising demand. Tenants now have additional alternatives for becoming their own landlords thanks to these recent launches.
A Stable Market
Tenants are now aware that the local real estate market is more developed because there are more laws and regulations in place than there were in 2008–2009. They are sure that their units will arrive on schedule and that their money won’t be wasted.
Investors suffered losses in the 2008–2009 period as a result of project delays brought on by the financial crunch among developers. But in the most recent pandemic crisis, this was not the case. Despite the possibility of modest delays brought on by pandemic limitations, projects are progressing according to plan.
Move-in Properties
Since there are so many ready-to-move-in apartments in Dubai, tenants are choosing to buy them instead of renting them out and moving in. Renters have the option to convert their monthly rent payments into equivalent monthly instalments (EMI) using this option. To capitalise on the trend, the biggest developers, including Damac Properties and Danube Properties, have been aggressively marketing to tenants, offering them up to 85% of the mortgage and monthly payments as low as Dh3,600.
High Rents
According to real estate consulting firm CBRE, average rentals in Dubai rose by 22.8% in the year to June 2023, while average prices soared by 16.9%, the fastest rate of growth since late 2014. Tenants are being forced to acquire more homes as a result of rising rents, particularly those who plan to stay in the nation for an extended period of time and have retirement, golden, or silver visas. The growing costs are another draw for them. Many Asians are reportedly selling their possessions in their home countries and moving to Dubai, according to brokers and developers.
Conclusion
The Dubai property market continues to steadily grow, guaranteeing residents who decide to become buyers a high ROI. The rising population, along with the high influx of high net-worth individuals makes 2023 the best time to buy property in Dubai.
