Mahmoud Al Burai says a "reverse migration" is occurring as residents of other emirates shift towards Dubai
Dubai’s real estate market is in the midst of a shift towards increasingly affordable housing options, forcing developers to compete on quality and affordability, according to Mahmoud Al Burai, the CEO of the Dubai government’s Real Estate Institute.
According to research from the Affordable Housing Institute, almost 82 percent of transactions in 2017 were for below AED 2 million, with almost half (47 percent) below AED 1 million. Of the transactions, 85 percent were for apartments, the clear choice for budget conscious residents.
“Dubai is more affordable, and people can afford (living in the emirate). We have a reverse migration from other emirates to Dubai,” Al Burai said on Wednesday. “A lot of people are…coming and investing in Dubai. The trust is there…the prices are a little down, but this is good for us, because we want to bring more people to the city. This is part of our economic growth.”
Additionally, Al Burai said that the continued decline of rents and property prices in 2018 are a sign of “trust” in Dubai’s government and real estate sector.
“I see trust reflected in the numbers. In 2008, maybe people were saying that we would never have a strong-off plan market anymore, but last year, the off-plan market was very attracted and people actually invested more in off-plan [properties],” he noted.
“This shows how much trust they [investors] have in the system, the economy and the vision of the government.
“We have a long-term vision. Real estate is not about short-term, real-estate is about long-term, and this is the culture we want to promote in this city,” he added.
“The prices…are very minimal compared to 2007 and 2008, and this shows how much more mature and resilient this market became, and I’m very optimistic and excited about 2018 and 2019 and looking forward to Expo and beyond.”
Al Burai added that the rent and price declines, combined with the significant number of handovers expected in 2018, are forcing investors and developers to focus on the quality of their offerings.
“Now quality is making (the difference). Developers are competing on quality and want to provide the best. This is good for us,” he said.
This competition, he added, ultimately benefits local residents.
“They [developers] are giving flexible payments. They are giving long, extended payment plans and so on,” he added.