Dubai Property — It is less costly for a buyer than in 2015

It is still not expensive for an investor in India or the UK to buy property in Dubai, compared to what they would have been spending on the same in 2015. That’s because Dubai home prices have slipped off from their 2015 high – and also because these overseas investors are getting the benefit of currency fluctuations.

Buyers from the UK would find a home in Dubai 19 per cent cheaper today than in 2015, as would Indian (by about 14 per cent) and those from a euro-denominated countries (by a staggering 32.3 per cent), “which is why buyer groups from these locations so active in the market.”

“It’s still early days, but as the global economy revs back up to full steam, some of these currency discounts are already showing signs of stabilising, or even reversing,” said Faisal Durrani, Partner – Head of Middle East Research, Knight Frank.

Currency volatility had been acute in 2020, with the dollar gaining and shedding value. The dirham traced a similar trajectory given the peg to the dollar. Any sign of price or currency change “will no doubt up the ante for those who have been waiting on the sidelines for the right time to invest,” said Durrani.

Coming Together Nicely

The current sales trend in the Dubai property market shows deal flow at its best since the summer of 2014, when the market was buoyed by news of the city winning the eights to host the Expo. Now, with the Expo just another two months and a few days away, the market cycle is again on the up.

“We are seeing a slow, but steady upward creep in transacted values,” said Durrani. “The confidence that has been injected into the economy by the government’s phenomenal response to the pandemic has percolated across the economy – buyers feel more confident about life and are committing to home purchases in increasing numbers.

“Not just that, it’s larger homes – villas – that are seeing the sharpest rebound, with prices now about 17 per cent below the last market peak six years ago.”

Some Big Winners

Average home prices in Dubai remain 26.3% down from their previous high in mid-2015.

But certain nationalities are seeing significant price appreciation, when factoring currency wobbles against the UAE dirham in these six years.

“Egyptian pound purchasers have seen their investments appreciate by an impressive 51.4%, while Pakistani rupee buyers are currently enjoying gains of over 12%," said Faisal Durrani of Knight Frank.

"If we rewind further back in time to the heady days of 2007, Egyptian and Pakistani buyers would have seen their investments increase in value by a staggering 200% plus. European buyers meanwhile would be looking at gains of 20.5% since 2007, while for British buyers, it would be nearer 68%.

"The flipside to the story is of course some of those who held off, or were unable to step onto the property ladder, relative prices are much more attractive today than they were in 2015.”