What’s at Stake this week? | April 21, 2024

Abu Dhabi is poised to become the global epicenter of eSports with a groundbreaking $280M investment in the world’s first eSports Island. Spearheaded by True Gamers, this visionary project promises top-tier gaming tournaments & luxurious accommodations. As this innovative project takes shape, it will drive demand for premium accommodations and commercial spaces, creating lucrative opportunities for investors and developers alike. 

📊Strategize With Stake

Real estate vs. Gold: Choosing the best investment in today’s market

In today’s fluctuating financial environment, selecting the right investment vehicle is pivotal for wealth creation and preservation. 

Real estate vs. Gold

Throughout 2023, gold prices reached new heights, driven by global economic instability and geopolitical strife. This trend continues to capture the attention of investors, many of whom are contemplating whether gold is the golden ticket amid current market conditions. However, when plotting a course for long-term financial growth, the decision frequently boils down to a few asset classes with real estate and gold being two of the most popular investments. Here’s a closer look at how these choices stack up.

A real case review

In 2021, the average price of an ounce of gold was about $1,799. By 2023, this price had increased to approximately $1,940.54 per ounce. If you had purchased gold in 2021 and sold it in 2023, you would have seen a profit of roughly $141.54 per ounce. This equates to a return on investment (ROI) of approximately 7.87%, assuming there were no additional transaction costs such as fees or taxes.

In contrast, Stake sold a property, Al Majara, Dubai Marina, in 2023. An investor who invested $1,799 in this property in 2021 received ~$2,554.58 upon its sale in 2023. This represents a remarkable ROI of 42% over a holding period of 2.5 years. 

Bottom line? The appreciation observed over such a short period is nothing but impressive, indicating that the market is exceeding expectations. Typically, real estate is considered a long-haul investment, however, 2.5 years is a short investment horizon. Thus this example highlights the substantial returns that can be achieved through wise real estate investments in markets like Dubai,  compared to more traditional investments such as gold over the same period.

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🔍Market Watch: UAE

Dubai real estate Q1 2024: Another win for the books

The Q1 2024 real estate report for Dubai has once again highlighted exceptional performance in the sector, with no signs of slowing down. This persistent success raises the question: What keeps Dubai’s real estate market consistently at the top? The answer lies in a combination of direct and indirect factors that collectively contribute to the thriving nature of this sector. Let’s explore these elements:

Strong economic growth

The economic outlook for Dubai continues to be promising, with the UAE Central Bank forecasting a GDP growth of 4.2% in 2024, which is expected to escalate to 5.2% in 2025. Such economic vitality creates a favorable environment that boosts investor confidence and fuels the demand for living in the UAE.

Tourism and expatriate influx

Dubai’s strategic initiatives to enhance its tourism appeal and attract expatriates are paying dividends. According to the Dubai Department of Economy and Tourism, the city welcomed an impressive 3.67 million tourists in the first two months of 2024 alone, marking an 18% increase year-over-year. This influx ignites demand for both short-term and long-term residential properties, further energizing the real estate market.

Did you know? Dubai International Airport has been named the world’s busiest and most luxurious airport, accommodating over 87 million passengers in 2023.

More into Q1’s market performance 

• Transaction volume and value: Reflecting the vibrant economic backdrop, the Dubai real estate market witnessed a 17% year-on-year increase in sales transactions, with a total of 36,200 transactions in Q1 2024. The transaction value also saw an increase of AED 115.6 billion—a 30% uptick from Q1 2023 

• Luxury segment growth: The luxury real estate sector in areas like Palm Jumeirah and Jumeirah Bay Island has been particularly dynamic, with transactions exceeding AED 1.7 billion, thus reflecting the city’s increasing appeal to high-net-worth individuals. This segment benefits from Dubai’s enhanced universal connectivity and world-class amenities, making it a preferred choice for the wealthy

Bottom line? The following report pinpoints the resilience of Dubai’s real estate market and reinforces its status as a top global real estate hub, offering investors diverse opportunities for wealth generation in a stable and secure environment.

Stake section

Stake exited its third property!

We are thrilled to announce our third exit in the Dubai Marina area, from a beautiful 1-bedroom apartment located in DEC Tower 2!

Stake has received an attractive offer for the property, significantly exceeding the property’s latest valuation, which has resulted in substantial returns for investors in just over 2.5 years 

*According to the sale price that the property achieved when it was sold in March 2024.