What encourages buyers to invest in Dubai residential properties?

It is amazing to see that Dubai property market has finally started recovering after a long spell of bad performance after the global economic crunch. Since its recovery from the 4th quarter of 2011, Dubai realty market has been amongst one of the top global investment markets. With the huge volume of professionals relocating to Dubai and expats showing interest in buying high end residential assets in the market, the villa prices showed a significant rise of almost 20 to 21% and apartments showed 4 to 6% rise in 2012 which is set to further grow in 2013. Experts believe that Dubai residential properties will be in high demand in the years to come if the construction quality of the upcoming developments remains high and the supply of property units remains low.

According to a performance report, the sum of the value of total Dubai residential real estate transactions in 2012 was Dh10.3 billion which is 49% higher than the sum of the previous year’s transaction volume which was Dh6.9 billion. Another trend was noticed that most of the buyers showed interest in buy-to-let luxury residential properties instead of selling them ahead after a slight increase in their sale prices. Bayut.com, a renowned online Dubai real estateportal, indicates that the residential sector will be the most preferred option for investing in Dubai realty market. The following article enlists some reasons why buyers and tenants invest in Dubai’s residential rental properties.

High Demand

The average rent of residential properties witnessed a notable increase at varying rates across Dubai since the beginning of 2012 and the major reason was the high demand of villas and apartments for rent in Dubai. Demand of rental properties began to grow gradually from the 4th quarter of 2011 on a limited scale and was limited to only high-end areas, but gradually it has reached high levels even at secondary locations and for all types of residential property units. Because of the high demand, wealthy investors feel encouraged to invest in buy-to-let properties.

Rental Spike

Rental spike is another reason to invest in buy-to-let properties in Dubai. According to a performance report, average apartment rents in Dubai rose by 17 percent in 2012 as compared to 2011 values, outperforming the villa market which saw an increase of 14 percent. The experts believe that residential sector, especially the apartment sector will continue to see an upward trend in rents so wealthy investors are advised to invest in Dubai buy-to-let properties.

New Residents in the City

A few experts attribute increased demand of Dubai apartments for rent to an increase in the number of new residents flying to Dubai from every part of the world. The UAE government has recently created several jobs in the city to pace up their economic growth directly and to boost the real estate sector of Dubai indirectly. People turning towards Dubai for jobs are drawn to rental properties since most of the landlords offer incentives with rental properties such as long term leases, rent-free period, furniture and appliances just to increase tenants’ inflow. Dubai rental properties are good investment options for all those wealthy investors who are looking for good investment options just to earn good amount in the long run.

Based on all these points, it can be said that a broad based recovery will be seen in rental properties segment of Dubai real estate market in 2013 on the back of continued economic growth, with main focus on residential properties.