Dubai property market 2020
Matthew Gregory, head of property sales at dubizzle Property, looks ahead to 2021 and the impact of Expo 2020 on Dubai’s property market
To predict the outcome of the property market after Expo 2020 – a topic that sees even top economists hesitate to share their opinion – would be foolhardy of me. However, from what we know about the current market, the upcoming supply, and the plans for the site post Expo, we can see that actions are being taken to maximise its economic impact, minimise market fluctuations and avoid any withdrawal symptoms once visitor numbers recede after the event.
According to fäm Properties, in 2019, apart from the overdue projects, there are around 59,800 properties scheduled for delivery. Yet, only around 33,800 properties that are 80-99 per cent close to completion are expected to enter the market this year.
Even though it is unlikely that all these units will be in the market, the increased supply will further impact the property prices this year. Saying this, the government’s efforts of creating relaxed rules on property ownership, the extended visas and hopefully a lower entry point for secondary property mortgages soon are important initiatives to incentivise investment and will allow the UAE to keep the momentum created by tourism boost after the Expo ends in April 2021.
The new visa rules that have recently come into effect, including the 10-year residency visa, will make it easier for those who view Dubai as a world hub to settle here and become contributors to the overall economy. This will also help in soaking up current and upcoming supply and will lead the market to see a much-needed stabilisation of prices.
Additionally, the Dubai Land Department may consider tokenising properties, which will open a wider international demand and, consequently, increase the property prices. We hope to reach an equilibrium price by the Expo 2020, especially as there are an additional 46,000 units planned to be handed over after June 2020 (according to fäm Properties).
The Expo site is already earmarked for major redevelopment in what will become the new suburb of Dubai South (8,228 units are currently under construction) providing a vast number of new homes, new schools and shopping centres, meaning that there will be no rusting Expo site in Dubai.
Al-Futtaim has started building a new Ikea and ACE hardware in the vicinity, which shows that there are tangible outcomes, ensuring that there is no bursting bubble after the event. The new suburb will be well connected to the rest of Dubai through the new Dubai Metro line, Route 2020.
This new metro line will lead to five new prime residential locations in which properties will become competitively priced and will increase the opportunity of relocation in people’s minds, particularly for those from the 25 million international Expo visitors considering a move. The accessibility to those locations, along with the positive PR, will only bring forward the property market post Expo and give it a boost.
It is easy to assume that prices will simply increase after the launch of Expo 2020, however, in reality, it is quite difficult to predict what is going to happen in the future, even if we try to base our assumptions on historical trends and data. Nonetheless, we believe that the amount Dubai has invested in the 2020 site will show tangible benefits well beyond the Expo itself, and the Dhs10bn investment into the Metro line is something that will remain and be part of its legacy.
The extent of the government’s marketing investments around the Expo has also guaranteed that Dubai would not only benefit from the time leading to and during the event, but also in the years to come after.
The image of Dubai will long be in the mind of the global population and this will definitely have a far-reaching effect on people’s ideas of moving to and settling in Dubai, attracting a new population to the city, ultimately giving the market some well-needed stability.