Is it time to invest in the holiday property market?
Dubai house prices are likely to rise 1.1 percent this year and 2.8 percent next year
Dubai is arguably one of the most attractive places to live in the world
The Covid-19 pandemic brought the new normal wave that changed the way almost every industry works. Arguably, the holiday and travel industry was impacted the most.
With travel restrictions and lockdown regulations, people turned to holiday homes within their areas that provided safety, privacy, and a much-needed break from their daily lives.
Hence, purchasing a property on the UAE market or remodelling a second home into a holiday rental has become one of the most lucrative investments in recent times. This has led to the much-anticipated staycation boom, which is one of the primary causes for the surge of prices in the Dubai property market.
In fact, according to the Reuters poll of property analysts, Dubai house prices will rise for the first time in six years in 2021. Based on the insights derived from the poll, Dubai house prices are likely to rise 1.1 percent this year and 2.8 percent next year. These results have taken a complete 360-degree turn from predictions made in January when the prices were forecasted to decline by 2 percent in both years.
The increase in prices may seem like a bubble, and many investors are preparing themselves for a crash. However, I see things a little differently and believe that this is the right time to invest in the UAE holiday property market. Now, I will share some examples of why I stand by my theory, and how the staycation boom is proof that the wheels are already in motion.
Dubai: A one-stop-destination for literally everything
Dubai is arguably one of the most attractive places to live in the world. However, this city doesn’t just boast of its beauty, it’s convenient to live here as well. After all, it has everything one could ever ask for.
One of the greatest perks that this city has is its supporting government, which facilitates easy business formation and management, a strong legal system and complete transparency in rules and regulation. Moreover, the city also provides a safe haven for families as there are multiple renowned schools for children and low crime rates that contribute towards leading a high standard of living.
Speaking of the standard of living, the humongous properties, advanced technology and state-of-the-art infrastructure are just the cherries on the pie.
Added to this, Dubai has multiple malls and retails stores with brands that hail from all over the world. And, it’s located right at the centre of the world, allowing you to travel anywhere.
In terms of more recent events, there’s probably no other country in the world that handled the Covid-19 pandemic as well as Dubai, right from the lockdown to the vaccination drive.
The Supportive Local Community
Over the past year and a half, the local community of Dubai has been reinvesting in the property market, due to a plethora of reasons, including Families have moved to safer or cleaner neighbourhoods due to the pandemic; growing families have moved from their apartments to villas; large communities like the Palm have a scarcity in supply and cannot match the demand; there are numerous amazing projects in the pipeline.
Opening of the Global Borders Will Bring an Influx of Tourists
The global borders are soon to open, which is bound to be followed by tourists from India, Saudi Arabia, China and East and West Africa to come pouring in for their extended weekend getaway. This will result in many of them either buying holiday homes in the city or renting them.
Additionally, European, US and Canadian entrepreneurs might face heavy taxes due to the subsidies being offered. Considering the UAE remains tax-free, Dubai will soon see a massive influx of investment.
Moreover, even with the rising prices, property in the Dubai market is still undervalued. For example, the cost of beachfront property with multiple amenities in Dubai is a lot more affordable per sq. ft., compared to global super cities like Singapore, Shanghai, Mumbai, London, New York and Los Angeles.
The Impact of the Staycation Boom
The increasing popularity of staycations has largely accelerated the growth of the Dubai property market, especially when it comes to larger sizes and the luxury sector. In fact, over the past few months, global holiday homes are performing much better than hotels. In fact, it has become a trend to book a holiday home instead of a hotel.
The reason for this shift in consumer preference is because holiday homes offer a sense of comfort and ‘being at home’ feeling that hotels just cannot match. Moreover, as hotels usually adopt the cookie cutter approach, holiday homes provide guests with personalisation, which makes them feel special.
A combination of all these factors has resulted in the rise of the UAE holiday property market, allowing investors to earn double-digit returns on their property. I believe that as long as property prices keep increasing, so will the returns. There’s no better time to start investing.