Newly minted homeowners are seeking greater stability for the long haul as they establish deeper roots within the city.
Real estate agents have noted a rise in property sales in Dubai due to increased rental costs and an uptick in residents choosing to stay in the UAE for extended periods. The attraction of a UAE golden visa, often granted with high-priced property purchases, and the availability of interest-free payment plans for off-plan properties with minimal upfront costs are further driving this trend. Manal Fraiwat, Chief Property Management Officer at property management consultancy Asteco, described this surge in sales as indicative of a transformation in the property market. According to her, more residents are opting to become homeowners for long-term stability and to circumvent escalating rental prices.
Increase in foreign buyers
In the past year, Asteco observed an increase in property acquisitions from both international and non-resident buyers in Dubai.
According to Asteco’s property report for the third quarter of 2023, there was remarkable growth nationwide, with expectations of continued positive momentum this year.
According to Fam Properties, property sales in Dubai surged to Dh411.7 billion ($112 billion) last year, marking a 55 percent increase from 2022. Dubai Land Department statistics indicate a significant uptick in foreign property acquisitions in the first quarter compared to the same period four years ago.
Ms. Fraiwat noted a growing trend of luxury apartment and villa purchases, driven by high-net-worth individuals pursuing opulent lifestyles and family-oriented communities. She highlighted the allure of off-plan properties for investors, citing their potential for capital appreciation and attractive investment prospects.
Feeling at home in the UAE
Government initiatives like the long-term residency and golden visa programs are also seen as factors contributing to the rise, she noted.
“This shift towards property ownership reflects a strengthening sense of attachment and dedication among UAE residents.
“While investing in real estate remains an option, an increasing number of residents are seeking to establish roots and build a future in the country.”
Jamie Grimshaw, co-founder of Luxury Invest Group, a boutique real estate consultancy specializing in luxury residential apartments and off-plan projects in both the UAE and UK, echoed similar observations among his clients and social circles.
“I’m in that category,” said Mr. Grimshaw, who relocated from the UK to the UAE in 2013.
“From when I first arrived, I’ve noticed a change in people’s attitudes. Previously, individuals would come for short stints, save money, return home, and purchase property… I believe Dubai has undergone significant transformation; people now aspire to settle down and reside here for extended periods.”
Mr. Grimshaw made the purchase of his property at Park Island in Dubai Marina two years prior, for which he paid Dh2.35 million.
“I initially intended to buy property back home, but now that I’ve made this purchase here, I have no immediate plans to return,” he stated.
Rising rental costs
When Sophie Kaila and her family faced eviction from their five-bedroom villa in Arabian Ranches, they opted to purchase rather than continue renting.
Having rented the house for the same amount they previously paid for a three-bedroom apartment in Dubai Marina, they found that its price had doubled since they moved in during the pandemic and could now be rented out for Dh450,000 per year.
“We concluded that if we’re downsizing, it’s better to invest in property,” said the British-Cypriot, who has twins, in an interview with The National.
“Considering our long-term perspective in Dubai, with our business here and our children’s education, it made sense to own something that offers long-term financial security. This way, we know the costs and won’t face sudden eviction notices.”
Ms. Kaila, who runs an art consultancy business with her husband, relocated to a three-bedroom villa in Emaar South, citing affordability and proximity to her children’s school as key factors.
Their experience reflects a trend in Dubai, where evictions prompt more foreign residents to transition from renting to homeownership, a departure from the historical norm.
For Bahraini resident Ahmed Ali and his wife Natalie from Lebanon, who have resided in Dubai since 2015, the prospect of purchasing property had been under consideration for years.
Upon receiving notice from their Dubai Hills landlord last year, they finally made the decision to buy a villa for Dh4.9 million in Arabian Ranches 2, intending to stay for at least the next five years.
“With prices not showing signs of decline, we sought the security of owning a home where we cannot be displaced,” explained Ahmed Ali.
Increased market confidence
Nikki Martin, co-founder of Palm Living Real Estate, noted a recent surge in European buyers, particularly from the UK.
“The increase could be attributed to escalating interest rates in their home country, alongside appealing tax advantages in the UAE,” she informed The National.
“In the current market climate, investing in the UAE appears more prudent compared to other destinations, whether for investment or residential purposes.
“Given the absence of any evident slowdown, supported by statistical evidence, purchasing property here appears more rational than in their high-tax, high-interest-rate home nations,” she elaborated.
Meanwhile, off-plan developments have gained traction among various buyer demographics, according to Ms. Martin.
“These projects provide convenient, interest-free payment options, facilitating expatriates’ entry into the UAE property market with minimal initial expenses.”
Advantages to buying property
Mr. Grimshaw emphasized that while the buying process may not be simpler than in the past and mortgage fees have increased, it is a more straightforward decision now.
“Dubai is universally desired as the ultimate destination. It’s widely recognized as the safest, most secure place to be. With current incentives like the golden visa and a growing market, there are clear advantages to investing.”
He recommended thorough research into preferred neighborhoods before contacting a mortgage broker.
“Calculate your budget carefully and explore available areas,” he advised.
“Additionally, it’s beneficial to stick with one agent. Identify a trusted specialist in your desired area and maintain a consistent relationship with them. This approach will streamline the property search process and alleviate unnecessary stress.”
