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The Dubai Expo 2020, a six-month-long extravaganza of innovation, was forecast to be an antidote to the emirate’s lackluster luxury property market last fall.
One year on and the high-end market is thriving all on its own, and the Expo—now kicking-off Oct. 1 after being pushed back from its original Oct. 20, 2020 start date as a result of the coronavirus pandemic—is expected to be the cherry on top, according to experts.
“The addition of the Expo to the mix this year will only prolong the healthy demand for Dubai real estate in general as the pandemic effect subsides ultimately making 2022 another great year for our sector,” said Andrew Cleator, managing director of Dubai-based estate agency Luxhabitat Sotheby’s International Realty.
After steadily declining since 2014, when the price of oil collapsed and tightened the purse strings of some of the city’s wealthiest home buyers, Dubai home prices finally bottomed out in amid the pandemic in November 2020, according to data released in September by Dubai-based Property Monitor, a real estate data analytics and market intelligence platform.
But on the heels of the trough, the high-end real estate market in particular hit a turning point.
“After the world acknowledged Covid is not a short-term problem, the more affluent started arriving in Dubai seeking a higher quality of life after extended lockdowns in their home countries,” Mr. Cleator said. “These new arrivals started snapping up luxury properties including penthouses and top-end villas after understanding the obvious benefits Dubai has to offer as a place to enjoy life safely.”
Further underpinning the appeal of the emirate is the relatively affordable price per square foot of homes when compared with other major cities across the world, and as a result, “demand soon started to outstrip supply which ultimately caused the current boom we are witnessing in the luxury sector,” Mr. Cleator added.
Since November, prices in Dubai have risen 16.2%. August—when values rose 1.6% from July—marked the 10th consecutive month of gains, Property Monitor’s data showed.
The number of homes changing hands has increased considerably. Last month there were close to 5,800 transactions in Dubai, the strongest performance recorded since December 2013, and up 30.1% on a monthly basis and 135.6% from last August.
There have now been 37,735 sales so far this year, and with four months remaining, Dubai is on pace “to equal, or even surpass, transaction volumes last seen in the boom years of 2013 and 2014,” according to the report.
The high-end house market in particular has been on a tear, with a string of deals around the AED 100 million (US$27.2 million) mark, including a custom mansion on the man-made Palm Jumeirah that changed hands in March for AED 111.25 million, and a Zen-like home in Dubai Hills Estate that sold for a little more than AED 100 million in August.
“The last 18 months have been an absolute roller coaster to say the least,” Mr. Cleator said.
The Expo will be the first world’s fair ever held in the Middle East, where nearly 200 countries plan to fill the 4.4-kilometer site, complete with its own Metro station, in the Dubai South district.
And despite the pandemic conditions, organizers are still expecting to hit their pre-pandemic anticipated attendance of 25 million visitors over the course of the six-month event. Ticket holders over the age of 18 will be required to present proof of vaccine or a negative PCR test taken within the previous 72 hours.
“The Expo is still a great opportunity for many visitors and potential residents to experience life in Dubai,” said Zhann Jochinke, COO of Property Monitor. “There are plenty of residential options at various price points available for potential investors who might want to try out the market before committing big sums for the long-term.”
Apartments in particular are set to benefit from the influx of international crowds, with an increasing number of sales on the horizon as developers sell their completed and off-plan inventory to visitors of the Expo, Mr. Jochinke said.
For the savvy investor looking to secure a deal, though, the window of opportunity for apartments—a sector that has been less active than the bustling house market—may be starting to close with the arrival of the world fair.
“The most lucrative time to purchase villas and townhouses may have passed,” Mr. Jochinke said, noting that prices in some communities have experienced 30%-40% price appreciation since the tail end of last year.
But “apartments, on the other hand, are now just starting to see price appreciation across the wider market.” he said. “Over the coming months, we expect apartment prices to climb, especially helped by the Expo, as the expected influx of tourists and potential investors is sure to show interest in this segment.”
This article was originally published in Mansion Global.
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