2019 The Wealth Report by Knight Frank explains Dubai Real Estate

  • March 08, 2019

Knight Frank’s The Wealth Report 2019 highlights residential and commercial markets across the world that offer opportunities and options for those looking to invest in property. We analyze the highlights on UAE and Dubai market in particular to share what it means the residents.

What factors drive the growth or decline in the market?

The Wealth Report that came out this week forecasts that the next 12 months will see a shift in the performance of global property markets. It is expected that purchasers and investors respond to greater uncertainty in the global economy due to a proliferation of market regulation and the rising cost of debt.

Trade tensions, political events and an increasing debt burden, alongside rising interest rates, will conspire to ensure that there is a slowdown in economic growth across the world in 2019.

This change in the economic landscape will be reflected in lower price growth in global residential markets. This more muted growth will in turn result in changing real estate investment strategies, as investors focus on income, asset management and development opportunities in order to secure outperformance as debt costs rise.

Downtown Extension: DIFC, World Trade Centre and Za’abeel, Dubai – will it attract more expats?

The development of the Downtown neighborhood has really boosted Dubai’s standing as a property market with truly global appeal. With its luxury apartments and top-flight amenities, such as the Dubai Mall, the world’s biggest shopping and entertainment centre, plus its proximity to the city’s key business hub, the Dubai International Financial Centre (DIFC), Downtown Dubai has become a magnet for young professionals and families alike.

Now the popularity of this live-work-play hotspot is spreading to surrounding areas, including DIFC itself, the Dubai World Trade Centre (DWTC) and the prestigious neighborhood of Za’abeel. With a range of new developments under way, the so-called “Downtown Extension” looks set to become a sought-after mixed-use neighbourhood.

Key projects include DIFC’s Gate Avenue, which offers nearly a kilometre of high-end retail and dining concepts linked by an outdoor promenade, as well as a landmark mosque and the flagship tower Brookfield Place. DWTC’s One Central development is set to revitalise the city’s CBD, while One Za’abeel by Ithra Dubai is an iconic mixed-use development featuring the world’s first One&Only Urban Resort.

Will fluctuating fortunes hit the real estate market in Dubai hard?

Analysts expect that five (Buenos Aires, Dubai, Hong Kong, Mumbai and Shanghai) will see prices fall this year, two (New York and Singapore) will see prices remain static and that the remainder will see prices rise – albeit modestly.

Healthy tenant demand, relative good value and an attractive lifestyle is what will ensure that price growth occurs in top global real estate markets.

Indian buyers (leading investors in Dubai) are typically attracted by world class education opportunities for their children, new business ventures and stable investment returns. Coveted markets such as London, Melbourne and Dubai draw significant interest.

Is there an upside to Dubai’s property market?

With drop in prices, investors looking for long term growth opportunities in Dubai can buy more property and wait out till the market picks up again, as predicted, few years after Expo 2020.

Dubai still offers one of the best rental yields in the world in certain neighborhoods.

Newer projects such as Emaar South and Arabian Ranches III are pegged to be a hit among investors.

The spread of private wealth across the Middle East region is centered on the major Gulf States, with Saudi Arabia taking the top spot, followed by the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain.