The year 2022 started on a good note for the property markets all over the world as the COVID-19 scare had worn off, and people had resumed their routine lifestyles. However, little they did know that another curveball is heading their way that is going to impact their purchasing power. We are talking about the upcoming recession here, the effects of which are already getting apparent in many parts of the world.

In retrospect, COVID-19 caused a lot of people to lose their jobs, businesses had to shut shop, and consequently, there was a major impact on the purchasing power. Speaking particularly about the Dubai property market, prices saw a dip, and there was a lack of activity for a particular time period. However, timely actions taken by the government and the initiatives offered by the development firms supported a quick recovery, and now the Dubai property market is standing firm on its feet, producing record-breaking numbers month after month.

But what about the upcoming recession? Is it going to halt the strong recovery the market is eyeing? Or will the Dubai property market remain unharmed? Find out everything here!

Dubai Property Market and the Upcoming Recession

Experts believe that there’s going to be a limited effect of the global recession on the Dubai property market. The emirate has battled serious issues earlier, and it has the capacity to fight it off again as well.

Price Freezing Strategy

The government has taken numerous measures to ensure the purchasing power of the general public remains unaffected due to the recent price hike and the upcoming recession. Among them, the most effective one has to be the policy to freeze the price of as many as 11,000 basic goods. These include milk, poultry, meat, bread, etc.

While this policy doesn’t directly relate to the property market, it will help control the prices of the basic commodities, thereby, there will be a limited impact on the cost of living.

Boost in the Real Estate Sector

The Dubai property market, as stated above, bravely faced the global pandemic, and since then, the real estate sector has been on the rise. New developments have been launched, expatriate and investor-friendly policies have been attracting overseas investors, and flexible payment plans are also compelling buyers and investors to buy property in Dubai.

According to the recent statistics, the Dubai property market clocked 30,903 transactions in total this year by the end of May. There has been a significant increase of around 11 per cent in property prices. A further breakdown shows that the apartment sector has increased by 9.6 per cent, while villas saw a price hike of almost 20 per cent.

Not the cost of the property, but the rents have also increased during this tenure. The market saw a little over 19 per cent increase in overall rents. Apartments rental in Dubai saw a hike of 18.3 per cent, while there was a 24.3 per cent increase in the rent of houses.

Similarly, the demand for properties in Dubai has been on the rise as well. And this is expected to remain prevalent in the time to come as well. The growth in GDP is another factor that will help the real estate sector and the economy, on the whole, to remain more on the stable side. Experts believe that it will further expand by around 6 per cent this year, supported by the growth in various sectors, including tourism, hospitality, and real estate, of course.

Increase in the Number of Mortgage Buyers

A recent report by Knight Frank reveals that currently, mortgage buyers for apartments and houses hover around 18 per cent of the total sales. This figure has devalued from nearly 40 per cent in the preceding year.  

This may appear to be a decrease, but statistics show that nearly AED 38 billion has been extended for financial mortgages by the end of May this year. This shows that the mortgage market is also cruising, and 2022 may make its way to the second spot on the list of highest mortgage deals carried out during the last five years.

Wrapping Up

To sum it up, it’s safe to say that the Dubai property market is well-positioned to face the global challenges ahead. However, the impact will be there but not as much as in other leading destinations.

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