Will 2023 be a good year for investment in real estate in Dubai?
The future of market seems to be very complicated in 2023 to be predicted. In global markets professionals are estimating down trend or optimistically stable and moderate housing market. That means more prices may not sharply increase like 2022. Global economy has been suffered from post Covid-19 crisis and Russia-Ukraine war during last two years. These main factors beside geopolitical mega drivers caused a highly inflationary situation in economies which resulted increase in interest rates. However for Dubai the story can be very different. In 2022, Government of Dubai successfully controlled the inflation and the power of purchase which resulted -2.17 inflation rate compared to 2021. Therefore developers in Dubai struggled less than other areas in term of construction materials and cost of construction has need effected significantly compared to other countries in the region like Turkey which lived around 80% inflation in 2022.
What are the positive factors effected Dubai real estate market?
* Dubai successfully managed to maximize benefit from Qatar Worldcup 2022
* Minimum inflation rate in 2022 among the other regions
* Ongoing demand for ultra luxury homes
* Dubai offers super high standards of living compared to other areas
Based on a report by UBS Global Real Estate Bubble Index 2022 many regions in the world have got bubble prices in property market like Munich, Vancouver, Torrento and only few cities are estimated to have fair value like Dubai, Milan and Sao Paolo in which properties are fairly valued.
Dubai Property Market Will Perform Better than Other Cities in 2023
Dubai housing market prices may not sharply increase like 2022, therefore finding a right property in right location with right price will play key role for successful investment.
Homist Team of consultants
Homist analysis show many factors will effect Dubai’s property market that will lead investors to be more conservative in their investments in Dubai’s market. Estimations based on statistical figures show, 2023 will not follow the extra ordinary growth trend happened during 2019-2022. The price index has reached to its best level before 2014 in Dubai. On the hand, a positive driving factor that may keep Dubai property market still more attractive for investors in supply-demand imbalance, as shown in below table, number of completed building in 2022 has reached to its minimum level since 2015. That might be result of scarcity of plots in Dubai or technical shortcomings in construction like human resource or construction materials.
In general, 2023 will be challenging year for all markets to find rigid solutions to overcome recession. Dubai may not face serious recession but will definitely take the affect from other economies. Investors would better to take risk averse strategies than last year. Return on Investment outlook will be slightly moderated whereas the capital appreciation seems not to sharply increase same as 2021 or 2022.
We highly advice our clients to analyze deeply the offers that they are receiving from developers of agents. However investing in a fair valued property in long term there is no doubt real estate market would appreciate the investment with an acceptable Return on Investment (ROI).
Rental Income (ROI) Will Be More Attractive Comparing to Sales Value
Properties in Dubai resulted an average of 4-6% rental return during 2022, however in 2023 the rental income has potential to increase around 2% on average.
2023 HOMIST TEAM OF CONSULTANTS
How shall I invest safely in Dubai?
Dubai property market like all other cities in the world have its own dynamics and complexities which requires proved experience and knowledge about different regions and property types. As an example buying an apartment in Dubai creek with fair-valued price would definitely bring more appreciation than buying an apartment in Deira with over prices.
Homist team of advisors will assist you from A to Z for your property investment in Dubai, meanwhile our advisors provide in deep research on the markets which results more precise advisory services for all types of real estate transactions – from idea to development and completion, sales and property management or long-term income asset and many other related services. Contact HOMIST Advisors today for a free consultation!
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