Why you should buy Dubai property before Expo 2020
True advantages that can make you decide for investing in Dubai real estate
Dubai property guide
Why you should buy in Dubai before Expo 2020
What real estate agents say about price downtrend in Dubai?
If you are looking for investment opportunities in Dubai, you surely heard that the prices had been falling since 2017. And everyone who plans to buy a flat in Dubai is worried about the trends in real estate in the Gulf.
These are reasonable concerns for the investors, and we can confirm prices are now lower than in 2017. According to Cavendish Maxwell, the average trading price for villas/townhouses in Dubai moved from AED 2.3 million at the end of 2017 to AED 1.8 million in the last quarter of 2018. Prices for apartments also moved towards the lower end of the range, averaging at AED 1.2 million.
Estate agent Savills says prices fell by 6-10% in 2018, and could do the same in 2019; but their analyst thinks the market is close to stabilizing. Certainly, Savills doesn't see anything close to the credit crunch and property crash of 2009-10 happening again.
How Dubai Expo 2020 can improve the situation?
It will have a huge impact on the whole city including hotel business, service section and housing market as well. Why? Because it’s one of the biggest events a city can arrange - only two events are bigger than World Expo - the Olympics and the FIFA World Cup (which Qatar will host in 2022). Once it opens in October 2020, the Expo expects to receive 25 million visitors, 70% of them from abroad. Just as a side notice – Dubai is a known destination point for tourists travelling in winter, it’s warm and not far away from European and Asian countries (in comparison to the “Down Under”) – there will be even more people selecting it for holidays in season 2020-2021.
According to analysts from legal firm Jones Day, construction and project spending has already boosted economic growth by 6% a year, and the Expo should increase its impact to 10% in 2020. The Expo is also expected to increase foreign direct investment by as much as $150 billion - money that will increase capacity and productivity.
But will the Expo also boost the property market?
Evidence shows that large events can contribute to significant growth in property prices. In Shanghai, for instance, property values have risen 46% since Expo 2010; in east London, prices rose 64% between the 2012 Olympics and 2017.
It's worth stressing, though, that the benefits of Expo 2020 won't just be short term. Vancouver saw benefits accruing up to 20 years after it hosted the 1986 Expo. Whatever the impact of Expo 2020 on real estate, its real importance is likely to come through giving Dubai a clear leadership role in business and tourism in the Gulf.
Why is it now a good time to buy in Dubai?
As a matter of fact, prices are highly affordable compared to other major cities.
And here we have listed some opportunities available before Expo 2020:
Since there is some oversupply in Dubai, developers are offering buyers incentives such as free legal fees, lower service charges, guaranteed rental income, and even deferred payment terms. Expo effect will make it stricter.
There are newly developed middle-income communities with even lower prices (like in Nshama's Town Square Dubai).
A huge development is running around the place where Expo 2020 will be held – Al Wasl Plaza and Dubai South in general – you need to look at those areas scrupulously, e.g. – Dubai Greek Waterfront – promises to be a new sightseeing point with a tower that is going to be higher than Burj Khalifa (currently the world's tallest building), and with seaside view; or Expo Golf Villas from Emaar just minutes away from Expo that are already available. Dubai South plan can be checked at Dubai South website.
As a general advice – be wise and check for the areas that could be in high demand during and after Expo, the real estate prices there are now very attractive. There is a certain risk to invest into new developments, but the ROI can be huge. However to be on the safe side you can still think about areas with proven demand – Dubai Marina, Palm Jumeirah and Downtown – the areas that are never empty.
Are there any other benefits for property buyers in Dubai?
There are some generic benefits you'll get by buying in Dubai, whenever you do it.
Dubai remains significantly cheaper to buy property in than other major cities - your money will go further.
Secondly, the ten-year UAE property owner's visa and retirement visa programs can be a significant benefit for those looking for residence (though neither of these visas will allow you to work in Dubai).
You won't pay any property taxes. You'll also benefit from a diverse investor base - purchasers from around the world are flocking to Dubai, so it's not a market that will be derailed by a single nationality pulling out of the market.
Dubai is a safe city - not just for individuals and families, who benefit from a secure environment, but also for companies, with a stable regulatory and commercial base. And Dubai Police Department is even providing a service to keep your home safe while you’re away (isn’t it awesome?).
But buying before Expo 2020, you're benefiting from soft prices, and you could stand to benefit from renting out your property during Expo, when rentals will be firm. If Expo brings in new investment, you'll see property prices firming up - and you may have got in at just the right time.
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Will Dubai finally benefit from Web Expo 2020?
If we go back to a subject, we can certainly say that some cities haven't benefited as much as they could have from major events, but Dubai has planned very carefully for how to derive the maximum benefit from Expo 2020. The development has both a project manager and a legacy development manager, whose job is to think about how buildings can be repurposed or transitioned to new uses. Dubai has defined a vision for how the city will develop after Expo, both economically and in terms of real estate.
As far as the Expo site goes, 80% of the buildings will be kept after the event. District 2020 will reopen in October 2021, six months after the Expo closes, with 700,000 square feet of residential space, as well as business facilities and public areas. Dubai is now positioning itself as a start-up hub for the region, with its Smart City initiative, 5G networks, and new rules making life easier for foreign-owned companies. Siemens has already committed to a new logistics hub in Dubai, for instance.
If Expo 2020 is as successful as it's predicted, it's likely the District 2020 properties will sell at a premium, though. If you want to buy in Dubai, you might be better off taking your decision now, while there are still good offers to be had from developers.