The impact of Expo 2020 on the real estate market in Dubai
This article was published on July 25th, 2022
Dubai is one of the most attractive destinations in the world for tourists, investors, and workers. The city's multicultural, beautiful, and prosperous reputation makes it a top choice for many. The real estate market in Dubai has been trendy with investors over the past decade, and the anticipation of Expo 2020 only added to this interest. However, the COVID-19 pandemic caused a dip in Dubai's various sectors, including real estate. Despite this, the city is quickly recovering, partly due to Expo 2020.
Expo 2020 had a positive impact on the UAE's economy and helped to boost the real estate market in Dubai. According to the Dubai Land Department, the Dubai real estate market recorded AED 22.7 billion in sales in June 2022, the highest in the past 13 years. This figure represents 71% of the total sale volume for 2021 and is 32.88% higher in volume and 24.21% in value compared to May 2022. This shows the significant growth of the real estate sector following Expo 2020.
Expo 2020: A Major Event for Dubai
Expo 2020 was held with a one-year delay, but the organizing team successfully managed the event, which brought people from around the world to Dubai. After the Bureau International des Expositions (BIE) announced that Dubai would host Expo 2020, the real estate sector experienced a surge as the city prepared to welcome millions of visitors. The focus was on short-term rental units and properties for sale. Even after the event ended, the real estate sector continued to see a boom, with increased prices. Studies show that property booms and price increases are typically seen in the five years following a significant event. However, the Dubai real estate market has seen these changes within two months of Expo 2020.
Government Initiatives and Amendments Attract Investors
This rapid growth in real estate can be attributed to government initiatives and amendments that have attracted many investors to Dubai. The city's unique location, first-class healthcare system, established education system, and desirable lifestyle makes it an attractive place to live or invest for locals and foreigners. This increased demand for property has led developers and property owners to raise prices. According to Reuters, property prices in Dubai increased by 7.5% in 2022 and are expected to grow in the coming years. Some real estate analysts predict that the price increase will drop to 4.5% in 2023 and 3% in 2024 as the market stabilizes.
Concerns for First-Time Buyers
While the increase in property prices is good news for investors, it may be a concern for first-time buyers who struggle with affordability. It is hoped that salaries will also increase as the market grows.