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Residency reforms and new short-term rental regulations have created new opportunities in Dubai’s property market. Image Credit: Shutterstock
This has been a year of reforms and price corrections. Here are the top trends in the Dubai real estate market that will continue to grow beyond this year.
Short-term rental properties now account for approximately 2 per cent of Dubai housing, says Mark Kennedy, co-founder and CEO of Kennedy Towers, adding that this is a very high percentage when compared to other global cities. According to a recent AirDNA data, there are currently over 6,100 active short-term rental properties (leased as entire homes) in the emirate.
“While the idea of ‘living like a local’ and having authentic travel experiences helped to create this category in the first place, this cannot come at the expense of comfort,” says Kennedy. “So we expect to see more hotel-like services being offered in these properties. Smart-home technology such as smart door locks, smart thermostats, noise monitoring software and autonomous robotic cleaning systems are used to improve and manage the experience inside a property. Operators will adopt Virtual Reality 3D tours to bring their property to life in a competitive market.”
New visa regulations, such as the 10-year Golden Visa, have had an impact on the investment appetite in the country, believes Emad Haq, vice-chairman of Haqsons Group. There are also now guidelines in place by the Dubai Land Department that safeguard landlord and tenant rights and ensure timely handover by private developers. “When investors are assured their investment is safe with stable rental returns, the market will thrive,” says Haq. The recent Law 6 of 2019 pertaining to jointly owned property, which has replaced Law 27 of 2007, now ensures a higher standard of property maintenance. Projects now also have to be listed on a new system called Mollak and service charges need to be approved by the Real Estate Regulatory Agency.
Luxury gets affordablea
Michelle Liddiard, luxury sales specialist at Luxhabitat, says luxury property transactions in the Dh5 million price range have remained the same over the last two years. However, for properties above Dh10 million, there is a slight increase this year. “On the Palm Jumeirah, property transactions for the value of Dh10 million-plus have doubled this year,” Liddiard.
She explains many people are now shifting to more prestigious locations, which were beyond their reach in previous years. “For example, residents previously interested in the Lakes and Emirates Living community can now afford to move to upscale communities such as Emirates Hills. New schemes introduced to include the benefit of an extendable residence visa of 10 years with new business set-ups, as well as retirement visas and property purchase visas have helped. We see a growth in clients buying holiday homes and setting up companies in Dubai to reap the benefits of these schemes.” Controlled launches
As the year comes to a close, only 45 projects have been announced to date, comprising approximately 14,000 residential units, says Nick Witty, managing director of Chestertons Mena. “New project launches have been trending down since their peak in 2017 when 221 were launched. In 2018, 102 projects were launched offering more than 24,000 residential units,” says Witty. “Oversupplies of stock have led to a buyer-friendly shift in the market. This is motivating many developers to offer investment incentives such as post-handover payment plans, a rebate of registration fees, freezing property service charges and guaranteed rental returns. These incentives are fast becoming a key characteristic of the UAE’s real estate market to meet the current market demand of affordable housing over luxury products.”
This year has seen post-handover deals getting back to being more realistic. Kalpesh Sampat, COO of SPF Realty Real, says developers extending payment plans 10 or 15 years post handover was not feasible. “It is essential to control the length of the offer and not increase the risk for the buyer, luring them to buy beyond their means or budget by offering such extended plans.” Payments plans in the market have now scaled down to three years or less.
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