What do Easing Travel Restrictions Mean for Dubai Real Estate?
The UAE has received repeated global praise for its handling of the COVID-19 pandemic, with stringent measures that included lockdowns, curfews, mass testing and widespread flight restrictions. As the first waves of Coronavirus stabilised and vaccinations were rolled out, the UAE (and in particular, Dubai) was seen as a ‘safe haven’ - an escape from the mishandled government responses, or punitive measures brought in too late in Europe and Asia. The government provided fast and relatively easy access to vaccinations, with Dubai World Trade Centre being repurposed as an inoculation facility and various others erected around the Emirate, as well as 24-hour drive-through testing centres. As a result, it is now the most vaccinated country in the world, per capita - a monumental achievement.
Many of those who were already resident in Dubai at the start of the pandemic have been closely watching travel information waiting for their home countries restrictions to be eased so that they can travel more safely to see loved ones, having been unable to travel last summer and opting not to travel in the winter. Last week brought good news - the UAE, Bahrain, India and Qatar have all been moved to the “amber list” for travel into the UK (as of 8th August 2021). What this means in practice is that paid quarantine (in a designated hotel) is no longer required - instead you must isolate at home for 10 days. Of course, there are rules within rules - if you are fully vaccinated with Moderna, Pfizer or AstraZeneca you can leave isolation after 2 days providing you have a negative test result - Johnson & Johnson will join this list later in the year. For those who have other vaccinations (such as SinoPharm), you can end your isolation after 5 days - again, on production of a negative test result from an approved facility.
India is also re-opening for travel into Dubai, with flights currently operating at 70% capacity as more and more stranded Indians, who make up the majority of the UAE’s expat population, make their way back into the country. Of course, it must be noted that things have by no means returned to a pre-COVID landscape and all travellers are still required to undergo testing 72 hours before travel, with some arrivals being subjected to retesting at DXB. All travellers should check the specific requirements of their destination and liaise with their airline. The easing of these restrictions will allow Dubai officials to properly plan ahead for winter tourism and ‘Selling Season’ which is expected to be heavily driven by foreign investment.
Dubai's Property Market
Despite various global factors, the Dubai property market has seen very little negative effect, after it ‘bottomed out’ in November 2020. Indeed, the first half of 2021 has seen an average price increase of 8% across the city with an additional 5% increase (year on year) expected for the second half of the year. Increasingly, buyers are not being deterred by price, and the practice of offering below asking price has all but disappeared, as properties move quickly - often before they have even reached the open market. With budgets stretching further in Dubai than they do in other cities (such as Hong Kong and New York), both investors and end users are taking advantage of a positive market to buy up units which are almost guaranteed to make a healthy return on investment. In April 2021, transactions totalled over AED 10.9bn - a volume not seen in over 6 years - and this shows no signs of abating, with transactions for the first half of the year totalling over AED 61bn. By comparison, the total transaction value for 2020 was AED 71bn. Multiple records have been set and surpassed this year with our own Riccardo Scala responsible for two of the biggest sales (at AED 111m and AED 105m) and the biggest rental (at AED 3.8m). Several high-profile off-plan projects are handing over this year (think One Palm and Atlantis The Royal), which will drive new surges as investors seek the next hot project in which to invest - and choice abounds. Low interest rates and LTV of up to 85% have converted many tenants into buyers as people look to create a more permanent base in Dubai - it has also driven an investment market seeking to capitalise ahead of Expo 2020.
Expo 2020 & Beyond
Due to start on 1st October and running until 31st March 2022, the expo will feature 60+ daily shows and 191 country pavilions with themes of Sustainability, Mobility and Opportunity - a by-word of Dubai. The Expo’s aim is focused on “connecting minds and creating the future” - tickets are already on sale and celebrations for the UAE’s 50th National Day will undoubtedly be a big part of the festivities, rounding out the “Year of the 50th”. All eyes will be on the Expo site with a detailed master plan already underway to repurpose the facilities once the five-month show has concluded - the Emaar South development is in close proximity to the Expo and is already popular with investors owing to its well-appointed units and positioning within the affordable luxury segment - some towers are already handed over and others will follow over the next 18 months. Its popularity will only continue to increase with the completion of refurbishment to DWC - Al Maktoum Airport - Emirates will move all operations to the upgraded site, with their staff following, which makes this exciting area one to watch. Metro lines are under construction, with indications that these will be extended right up to the airport and rumours that the lines will connect near the new Arabian Ranches III development.
Another driving factor of Dubai’s continued success is its recent visa and social reforms - seeking to make foreign investment, business ownership and residency even easier and more appealing to expats and continuing the Emirate’s work towards being the most innovative, and desirable leisure, tourism and residential destination in the world. It was announced earlier in the year that alcohol licencing will be removed in Dubai, and that non-married couples will be able to cohabit - long-term, auto-renewed residency is also now available with “Golden Visas” and 100% business ownership. There is no singular reason that people visit Dubai and there’s plenty to encourage you to stay, so if you’re looking to make Dubai your home, or seeking to move within the city please contact our Private Client Advisors today for the very best selection of apartments, townhouses and villas for both rent and sale.