COVID-19: No better time for UAE expats to enter the real estate market

COVID-19: No better time for UAE expats to enter the real estate market

A detailed look at the rationale behind investing in property now amid the pandemic

Dubai: Real estate is an asset class that was beaten down big in the aftermath of the pandemic. Experts now forecast that it will make a comeback but with a slight lag. But what does this mean for investors and buyers?

With the current pandemic backdrop, it has been widely recommended that those who are looking to enter the market for the first time should have slightly longer-term outlook as various macro factors are in the play such as availability of funding, banks’ risk appetite to lend, and revival of the job markets.

Pandemic-related property flux ease

However, with wider pandemic-related uncertainty dissipating globally with multiple developments around a potential vaccine, an economic rebound is in sight – which results in recovery in all facets of an economy. This is excellent news for real estate investors in the UAE, particularly the real estate segment – that makes up nearly 40 per cent of economic growth.

So if one has the liquidity and means to support a mortgage now, property consultants and analysts are currently recommending that now is a great time to buy as valuations are attractive and cost of real estate-related funds are at the lowest.

However, before we elaborate on the current prospects surrounding investing in real estate funds and related stock market assets, let’s first discuss an integral part to investing in them. As investing in market-traded assets are highly-dependent on how the UAE property market is currently performing, it is vital to first gauge how investor-friendly the sector is right now.

UAE property now more attractive

The UAE’s real estate industry last week registered improvements in global property consultant and investment manager JLL’s 2020 Global Real Estate Transparency Index (GRETI).

JLL’s GRETI 2020 provides a reliable measure of real estate market transparency and is a useful indicator of a city’s overall ‘real estate investment health’. In this year’s edition, the index reveals the increasing attractiveness of Dubai and Abu Dhabi as global investment hubs within the region.

Affordability within Dubai compared to similar global cities is valued by multiple experts as ‘excellent’ and it should also be noted that the UBS Global Real Estate Bubble Index marked Dubai as ‘fair valued’ compared to cities like New York, London and Paris.

UAE expats among top investors

Indians topped the investors’ list in Dubai’s real estate sector last year, according to official figures released last week. A total of 5,246 Indians has invested in the property market in the emirate as per the Dubai Land Department (DLD) records, followed by 5,172 Emiratis.

As many as 2,198 Saudi investors have chosen assets in Dubai. Chinese investors in Dubai real estate number to 2,096 followed by the UK with 2,088. The investors from Pakistan came sixth with 1,913 followed by Egypt (955), Jordan (855), the US (682) and Canada (678).

Expats lead in investment value

Indians also topped in investment value, injecting more than Dh10.89 billion last year into the emirate’s property sector, followed by Dh8.1 billion by Emiratis, Dh4.92 billion from Saudi Arabia, Dh3.97 billion from the British investors and Dh3.65 billion by the Chinese nationals.

Investors from Pakistan pumped in Dh2.79 billion into the emirate’s real estate sector last year, followed by Jordan (Dh1.57 billion), Egypt (Dh1.42 billion), France (Dh1.1 billion) and the US (Dh1.25 billion).

Published:  November 23, 2020 18:02 |Justin Varghese, Your Money Editor

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