4 reasons suggest the continuity of Dubai’s real estate momentum
Saleh Tabakh, the expert of investment portfolio management:
- Saleh Tabakh:
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“Dubai propertied will maintain the robust demand, in spite of the high interest rate”.
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Dubai’s real estate market needs 50.000 unit more this year”.
Dubai, United Arab Emirat March 2023: Saleh Tabakh, the expert of investment portfolio management, said that Dubai’s real estate market maintains the robust demand, in spite of the high interest rate and expectations from the part of many experts that the demand for properties will decline globally.
Tabakh, who is also the CEO of Al-Andalus Courtyard Real Estate Developer, mentioned four main reasons that suggest the continuity of Dubai’s real estate momentum.
“The first reason is attributed to the strength of the UAE economy, and the conversion of Dubai to a main destination for the immigrating funds and investments from several countries all over the world, thanks to the high trust in Dubai and also its status as safe refuge for investments, owing to the facilities and guarantees offered by Dubai government”, Tabakh told.
“The second reason is represented in the fact that Dubai properties are still within the affordable range. Despite the soaring cost of loans due to the high interest rates, and also the increase of the real cost of property purchasing, the prices of real estates in Dubai are suitable, as compared to their counterparts in the main global real estate hubs”, he stated.
“In London for example, the average rate for one bedroom+ hall in the good neighborhoods are about AED 2 Mn, let alone the high taxes. In the meantime, in Dubai you can buy a villa or an apartment of two bedrooms+ hall against the same price, without any taxes, , plus completely untaxable net rental returns, while the operational fees are lower than any other place”, he added.
“The third reason is the fluctuation of interest rates. They can probably decrease to more reasonable levels, if the global inflation declined within 3 years, according to the global expectations. Therefore, there is a significant category of buyers, who are currently benefiting from the available bank facilitations, as the banks try to offset the soaring interest rates, in the context of increasing deposits, particularly from outside the country. These people got bank loans of long durations, which were more difficult in the past, and the majority of these loans are mortgages”, Tabakh highlighted.
The expert of investment portfolio management noted that the fourth reason is the fact that the real estate developers offer many facilities for property purchasing, and the investors benefited from the same. “The property market proved that it is one of the safest investments, and its performance surpassed the ones of financial markets, and even the gold markets. The real estates are a palpable investment that cannot be lost as an entity, and even if their prices plummeted, it is possible to benefit from their rental returns. Thus, the property investment is the “king of investments” and the most demanded one”, Tabakh highlighted.
“Due to current scale of real estate development and handover of units, there is a shortage of house supply in Dubai for the current year, which is amounted to about 10.000 units. The analysts argue that Dubai can absorb extra 25.000 units annually, and this estimation is highly conservative”, he advised.
“To meet the demand of this year, Dubai needs to double its stock of residential units, and add 50.000 more. It is expected that 40.000 units will be accomplished in Dubai and handed over by the end of 2023”, Tabakh added.
“The rise of interest rates does not affect the borrowers currently. Moreover, the majority of property buyers who come from India, Pakistan, Russia, Egypt, and other countries used to high interest rates, up to 10%. Therefore, they see that the mortgage rates here in Dubai are more reasonable”, he noted.
“The flow of high-net-worth individuals (HNWIs), as well as population growth, lead to the increase of demand for properties. The investors and real estate buyers are often concerned regarding the futuristic increases in property prices. It is possible to compare the potential increase in property prices with the rise of interest rates”, Tabakh continued.
“If the house buyers or investors have the choice between higher interest rate now and higher price as well as the same interest rate later, they will surely choose the first one”, he concluded.
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About Saleh Tabakh:
Saleh Tabakh, who has extensive experience in the real estate market exceeding 18 years, has been CEO of Al Andalus Courtyard Real Estate Developer in Dubai since November 2020.
He was an adviser to the CEO and Head of Trade, Development and Operations in the “MAG Real Estate Development” between 2019 and 2020, on the board of “GLG”, a consultant based in New York City, between 2016 and 2021, CEO of the “Delta International” real estate company between 2014 and 2019 and General Manager for Middle East at the “United Excellence”group between 2013 and 2014.
He held several positions in the Dubai Properties Group over a period of ten years, including: Chief Commercial Officer between 2010 and 2012, Director of Marketing and Communications between 2009 and 2010, Senior Executive Officer of Marketing and Communications between 2007 and 2009, and Property Executives between 2006 and 2007. During his career he contributed to important projects such as the “Jumeirah Beach Residence”, “Business Bay”, “Sunrise and Sunset Mirdif”, “Layan” and “Al Waha” projects in Dubailand, “Al Khail Gate” and “The Villa”.
Saleh Tabakh supervised and contributed to more than 18 important real estate projects in the Emirate of Dubai, and participated with the Dubai Land Department in launching initiatives, the most important of which is the crowdfunding initiative, collective ownership, and other important initiatives.
He began his professional career in the field of building materials, where he worked in the technical support department in the “National Paints” factories between 2003 and 2006.
He holds a master’s degree in business development in 2015 from the Open University in the United Kingdom, a master’s degree in risk management in 2010 from the University of Bradford, and a bachelor’s degree in entrepreneurship in 2003 from the University of Greenwich.
