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DubaiWith rents rising and properties selling off briskly, the expatriate hub of Dubai is in the grip of a housing boom, backed by wealthy expatriates that has enthused investors and burdened tenants.
Dubai, famous for its towering skyscrapers and ultra-luxury villas, is set to see record real estate transactions in 2022, mainly due to an influx of wealthy investors — especially from Russia.
That helped rake in more than $140 billion last year, marking a 76 percent annual increase in property market transactions for the Gulf city-state, based on the latest official figures.
“The market has changed massively in the last year – it’s been great for landlords, but not so great for renters,” said Jacob Fletcher of the brokerage firm. betterhomes,
Although it may not be as rich as oil United Arab Emirates Capital Abu DhabiDubai attracts expatriates with tax incentives, luxurious lifestyles and cheap services provided by low-wage laborers from Asia, Africa and the Middle East.
Real estate consultancy Knight Frank said the 219 sales recorded in 2022 were “more than the total sales recorded between 2010 and 2020” in upscale Dubai neighborhoods, where properties sell for more than $10 million.
Property prices in these prime locations are set to increase by 44 per cent in 2022 as compared to a year ago.
“Dubai’s luxury market was one of the fastest growing in the world, but remains affordable compared to major major cities,” said Faisal Durrani, head of Middle East research at Knight Frank.
– Rich Russians – A decade ago, Dubai’s property market collapsed due to the financial crisis.
The city is now a magnet for ultra-wealthy investors, including Russians, fleeing the effects of sanctions following their country’s invasion of Ukraine.
According to BetterHomes, Russians were the largest foreign buyers in Dubai’s property market last year.
The brokerage firm says British, Indian, Italian and French nationals are also among the top investors.
Entrepreneurs, business executives, bankers and celebrities are among the hordes of customers vying for a home in one of the first cities to open up after the COVID-19 pandemic.
Farhad Ajiji, head of property development firm Ajiji Developments, said, “We are seeing a lot of customers from Europe who want to come here and who want to send their children to school here, want to start businesses here.”
“So, we’re seeing a lot of new customers, and they’ve kept the market very busy.”
Expatriates comprise the majority of Dubai’s population of more than 3.5 million.
But the housing boom has made it more expensive for them to live in the city.
“The rental market is up about 20 percent this year compared to last year,” said BetterHomes’ Fletcher.
“People who have lived here, especially for a short period of time, are not very happy about how high the prices have gone.”
– ‘Take the Hit’ – The real estate sector accounts for almost a third of Dubai’s economy.
Residents of the city are used to volatility in the property market, with prices falling during the pandemic as well as the 2009 financial crisis.
With inflation rising across the world, the rapid rise in rental prices in recent months has raised concerns for many.
“The market is so crazy. It’s so expensive,” said a Western expat who has lived in Dubai with her husband and son for five years.
The family must find a new home as their landlord has decided to sell the apartment.
“The market is very, very different. So, we have to pay for something smaller and so forth,” he told AFP on condition of anonymity.
Social media networks are buzzing with disgruntled tenants who are locked in disputes with landlords over rental prices.
The migrant said, “What can we do? We have to move forward so we have to take the hit.”
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