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World Cup 2022 had a ‘positive effect’ on the Dubai real estate market
Following the mega sporting event, there has been an uptick in real estate demand in Dubai
The positive effect of mega events like World Cup 2022 is not confined to the host nation’s economy, popularity, and tourism. It raises the region’s appeal and leads to buoyant real estate demand.
Take for instance, the unaccounted ripple effect of the greatest football tournament in Qatar in Dubai’s property market. At the start of November, a report by real-estate developer ZāZEN Properties predicted that Dubai’s volume and value of the sales for off-plan and secondary properties would hit a 12-year high.
The World Cup 2022 had “a positive effect on the Dubai market,” says Prince Ufuoma Eshalomi, Sales Director at Powerhouse Real Estate.
“The investors were buying and leasing properties to holiday home companies.” The offside is it has harmed the end user as we are all being priced out of the market as demand is high, but supply is low.
Before the build-up to the World Cup, investors were buying and leasing properties to holiday home companies. Now, they are purchasing studios and apartments, adds Eshalomi.
There are various reasons why Dubai provides a favorable environment and market conditions for buying property. While tourists flocked to the region during the World Cup, the real effect will be in the following months.
Due to a significant surge in demand for leasing in Dubai, local rental prices were driven up by 50% over the three months before the event, says Alex Galtsev, founder and CEO of Realiste.
Dubai enjoys the status of a top destination for real estate buyers. Galtsev says, “Generous visa programs and affordable housing, compared to New York and London, at least, are among factors that make Dubai stand apart. But the World Cup 2022 played its role in attracting more attention to the region.”
Realiste has developed an AI-powered tool that enables real estate investors in ten major cities in the world, including Dubai and Riyadh, to see the asset’s price history, discover the average price in the neighborhood and book it online without having to travel or deal with third parties.
WHO IS BUYING?
“This is a developing city, and the prices are only on the up; the ROI of most investors on their properties exceeds 6%, and the world record landmarks peak the prices in the community,” says Eshalomi.
All eyes are currently on the Middle East, especially Dubai, he says. “If it stays tax-free, safe, keep up the high quality of life and continued development, then there’s no other city that can beat it.”
According to Galtsev, three major categories of people currently buy property in Dubai. The first category is people who want to settle by buying an apartment in Dubai. “The inflow of Russian investors, entrepreneurs, and professionals is a significant part of this category.”
The next category is people who want to keep their assets safe. Galtsev says, “The UAE is an ideal place for capital storage as it happens to be one the most stable regions in the world. It is not affected by the current geopolitical situation and energy crisis.”
The third category is people who invest in real estate to earn money. These investors see Dubai as a fast-growing market where they can profit by buying an apartment and selling it in the next several years or even months, depending on the market situation, Galtsev explains.
Citing an example of the Jumeirah Village Triangle, Galtsev says an average apartment in this district would cost you $199,156, according to analytics. But prices will rise by 62% in the next three years. However, only some areas of Dubai will give investors much profit. For instance, Dubai Marina prices will rise by 19% in the next three years. And even in the profitable areas, some projects will bring investors no money. “It is a challenge to find hidden gems here,” he adds.
“People tend to choose Dubai as it was one of the first Emirates to allow foreigners to buy property. Since then, the international business community has grown significantly. So it seems easier to find a job or run a company from here than from other Emirates,” he says.