What’s at Stake this week? | March 17, 2024

We typically use this space to discuss general real estate trends, but today, we’re dedicating it to express our gratitude to our valued Stake investors. Your trust has propelled us from AED 20M in property transactions in December 2021 to a whopping AED 300M this March. This milestone signifies strong investor confidence, showcases the vitality of Dubai’s real estate market, and highlights the continued growth ahead for Stake. 

📈Emerging Market Trends

Ramadan: Setting new real estate trends in Dubai

Ramadan, a period marked by reflection and spirituality, also casts its influence on various sectors, including real estate in Dubai. Contrary to common belief of market slowdowns, this holy month initiates a series of shifts in market dynamics, consumer behavior, and developer strategies, collectively shaping a distinctive investment landscape. 

Impact of Ramadan on Dubai’s real estate market: 

Ramadan 2023 challenged common perceptions of a quiet real estate period in Dubai, demonstrating marked vibrancy and resilience. Here’s a detailed look at the dynamics and outcomes:

• Launch of new projects and special deals: Acknowledging the shift in consumer behavior during this month, developers and sellers aligned their offerings with the spirit of Ramadan by introducing Ramadan-specific incentives. These included flexible payment plans and discounts, making property investments more attractive and accessible

• Record-breaking transactions: The Dubai Land Department witnessed a remarkable uptick in real estate activity during Ramadan 2023, registering over 9,763 transactions. This reflects an impressive 84% growth compared to the same period in 2022. The total transaction value increased to AED 31.89 billion, up from AED 17.3 billion in Ramadan 2022. This unprecedented growth signals the period’s potential for investors

• Diversity in investment opportunities: Transactions spanned a variety of segments, including luxury residential properties in Palm Jumeirah and prime commercial spaces in Downtown Dubai. The sales price of 1-bedroom apartments in prime locations notably increased, reflecting a broader appeal to investors seeking accessible and affordable options

• Investment hotspots: Dubai Marina, Downtown Dubai, and Dubai Creek Harbour emerged as focal points for investment, driven by their potential for capital appreciation and rental yield

Bottom line? The influence of Ramadan on the UAE’s real estate dynamics varies by location, property type, and economic backdrop. Despite these factors, the robust findings from last year, backed by the UAE’s strong economic standing, indicate the market’s resilience and potential for growth. This leads us to question: Is Ramadan the prime time for property investment? As Ramadan 2024 concludes, a thorough examination of the real estate performance will be essential to understand the strategic significance of this period for investors, setting the right tone for such a trend. 

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🔍Market Watch: UAE 

Messi owns in Dubai

Dubai’s luxury real estate sector is experiencing exceptional growth, drawing the attention of high-net-worth individuals (HNWIs) worldwide, including global sports legends and A-list celebrities. But what makes Dubai’s luxury properties so appealing to investors and celebrities alike?

• Rising global wealth:

The influx of HNWIs into Dubai is reshaping the luxury real estate landscape. According to projections from Arabian Business, the UAE is expected to witness a 24.6% increase in HNWIs by 2025, fueling a trend of demand for ultra-luxury properties 

• Sustainability features:

Today’s luxury real estate market is increasingly characterized by a demand for sustainable design and quiet luxury. High-end buyers prioritize eco-friendly features and understated elegance, seeking properties that reflect their lifestyle and values

• Celebrity effect:

• Lionel Messi purchased a luxury mansion in Dubai Hills, showcasing the city’s unmatched exclusivity 

• Cristiano Ronaldo acquired a mega-mansion on ‘Billionaires Island,’ aka Jumeirah Bay Island,  further emphasizing Dubai’s prestige among the world’s elite

When icons choose Dubai for their luxury homes, it sends a powerful message. It’s like saying, “If Messi or Ronaldo bought here, I want in too” showing just how contagious the appeal of Dubai’s luxury living is.

• A leading market for luxury residences:

With 176 luxury property sales worth over $10 million in the first half of 2024, Dubai’s luxury market is on course to outpace global counterparts like London, New York, and Paris, driven by its compelling value, economic resilience, and stability.

Did you know? Dubai was ranked fifth globally for the largest number of homes sold at $25 million and above in 2023

Bottom line? In conclusion, Dubai’s property market continues to thrive, with luxury residences occupying a significant position. The combination of rising global wealth, changing lifestyle preferences, and the heavy influx of HNWI to the city, makes investing in luxury properties a noteworthy option in Dubai. 

Stake section

The recent update to Dubai’s RERA rent calculator aligns rental prices more closely with current market rates, promising better yields for landlords and investors. 

In 2023, the market saw a 19% climb in rental prices, and this update is set to reflect those changes. For those with long-term tenants, it’s good news. It ensures your investments stay competitive and profitable in Dubai’s vibrant property scene. 

For Stake’s investors, the influence of these changes will become apparent upon the renewal of your property’s Tenancy Contract for an additional year. These modifications will not be immediate, as adjustments to the tenancy contract rate are allowed only at the time of renewal. Generally, within the last 90 days of a contract, we engage in negotiations to renew at the maximum rate permissible by the RERA calculator.