Real Estate Evolution – Population growth in Dubai over the years
This year the population of Dubai has reached 3M. The population in Dubai has been growing significantly since the 1950s when the population of the city was just 20k.
After the year 1950, people started to come in the city to expand their trading business in the middle east. Places like Deira and Bur Dubai provided markets to these people. During 1950s and 1960s the population growth was at an annual rate of 5%
Then during the period of 1970 to 1980 the growth jumps to 15% annually
At the end of the 80s, it reached the milestone of 5 HUNDRED THOUSAND when the population still growing at the rate of almost 7% every year.
Starting of 2000s, the city’s population almost reached 1 million with no signs of slowing down
For nearly 20 years, till 2018 the growth rate was going at a brisk pace of 6-7% before Covid hit the world.
After covid-19 the growth rate dipped but the growth is not stopping there as people’s trust in Dubai is still growing due to its stable conditions regardless of the situations going around the world.
After the infamous fallout between Ukraine and Russia, wealthy businessmen from both the countries chose Dubai as their second home due to its neutral stand on the war.
People from countries like india, pakistan, bangladesh and sri lanka have not stopped coming and investing here due to its offering of better and safe living standards.
Dubai’s 0% income tax policy continue to attract many people from country’s like Europe and USA where the tax rates are extremely high.
Real estate in Dubai over the years.
Demand for property in the United Arab Emirates’ glitzy commercial capital of Dubai hit a record high for the first two months of 2023
In February alone, Dubai’s residential market saw 8,515 transactions — a whopping 43.9% increase from the previous year. January and February together clocked a total of 17,741 residential transactions.
All changed for Dubai when they started building downtown Dubai in 2004, they decided to build the world’s tallest skyscraper and worlds biggest mall. This meant the world to see Dubai as a place more than just desert and started the tourism in the country, that changed the Dubai real estate forever as it started the concept of freehold which meant people outside of UAE could purchase the property which was not possible before.
Since then, they’ve built some of the extraordinary things like world’s largest man-made island in the shape of a palm, Palm Jumeirah and an ultra-luxury hotel Atlantis the palm.
Real Estate in Dubai has had tremendous ups and downs since the Q2 2008 boom, when oil prices were at their peak of $145 per barrel. The average property sale price across Dubai was then AED2.2M for villas/townhouses and AED1.4M for apartments.
2009 saw the collapse of oil prices to just $32 per barrel and major banks around the World closed down and billions of US dollars were lost globally in all sectors. Dubai, unfortunately, was also affected, particularly by the lack of investment into the real estate sector, when villa/townhouses decreased in price by over 8% in 12 months and apartments average price across Dubai dropped down to AED698,280.
By Q1 of 2010, the market started to show signs of recovery with 63% increase in the average apartment sales prices and a 16.6% increase in the average villa sale, which fact could also have had place due to the title deed registration implementation right around this time.
The market remained pretty stable and developers started to release multiple off plan projects over the next few years with signficant investments coming in.
Then came the covid-19,
In 2020. Dubai’s real estate sector – and other critical, non-oil economic drivers, including tourism and retail – were hit hard as borders closed, travel ceased and investors stepped back.
While the pandemic took its toll on the global real estate sector, the industry in Dubai recovered fast
Local and federal government were quick to step in, however, rolling out a wide range of strategic measures and financial support packages. Collectively, these enabled the emirate to reopen for business as early as June 2020.
The link between international visitor traffic and real estate investor interest has always been important for Dubai. Business and leisure travellers temporarily exposed to the city and its key offerings are highly effective ‘sales agents’ for the emirate.
Despite significant year-on-year declines in hotel occupancies, Dubai Tourism reported 8.8 million hotel guest arrivals in 2020 and average occupancy of 54 per cent, outperforming other world-leading tourism hubs, including London and Paris, which were still under some form of lockdown.
In response to Covid-19, the UAE Central Bank initiated a US$70 billion stimulus package to support the UAE economy and financial system, with a strong focus on supporting businesses.
While this may not be an obvious driver of real estate activity, it provided yet another check mark for outsider market confidence. This, and other economic stimulus packages, demonstrated the speed at which the UAE government can act, helping to position Dubai as a safe bet for the future.
After the pandemic, Dubai’s authorities broke new ground and rolled out several additional visa initiatives and programmes. Collectively, these consolidate the emirate’s reputation as a leading business and leisure destination.
Changes in longstanding company ownership legislation have also opened new doors to real estate investment. In 2021, the UAE government announced that foreign-owned UAE companies are no longer required to have one or more Emirati shareholders with a 51 per cent-plus share capital holding.
Having safely navigated the pandemic, many Dubai residents have reordered their priorities. They see that Dubai is home and a place that offers long-term security, with property purchase now making financial sense.
This started to drive residential real estate prices upwards between Q2 and Q3 2021. As per REIDIN data, in June last year, secondary sales grew by 43 per cent year-on-year with further growth of 31 per cent in August. In 2021, the sales price per square foot was also up by 12 per cent on 2020.
This upward trend continued throughout 2022 AND 2023, both for sales values and rental rates
We can’t talk about the real estate market without mentioning Expo 2020 Dubai. Despite a 12-month delay due to the pandemic, the six-month event registered more than 24 million visits, with one in every three visitors from overseas and representing 178 countries.
The event drove demand primarily for short-term residential units. It also drove an anecdotal increase in property investment enquiries with the multiplier impact of a mega event a timely boost for the post-pandemic economy.
Dubai’s real estate market registered exceptional performance for 2021 with the residential segment breaking the previous 12-year transactional value record as per official data. Total sales transactions of US$4.1 billion represented 110 per cent growth on the previous 12 months with just under a 75 per cent increase in transaction volume.
Compared to 2019, this represented a 90 per cent and 44 per cent rise in value and total volume, respectively.
The volume of buyers passing through the mortgage market has also increased over the last few years. In 2021, Dubai Land Department reported 19,520 mortgage transactions, which exceeded the previous 2017 record by 26 per cent. This was largely due to the low interest rate environment.
So in all conclusion
Backed by a supportive forward-thinking government with a clear 2030 strategic vision, the appeal of Dubai’s real estate market is promising.
Meet the Author : Kanishk Chadha
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