Dubai mid-market homes will rise 15%, says Danube chief

Unsplash/ Alim

• Rizwan Sajan predicts property boom will continue
• Dubai demonstrated resilience during Covid pandemic
• Does not expect global recession to seriously hinder buyers

Prices in Dubai’s mid-market property sector could climb as much as 15 percent this year, the founder and chairman of Danube Group has said.

The prediction comes as the firm’s property arm, Danube Properties, sold out its latest affordable housing project, Elitz, on the day of its launch. Rizwan Sajan said that the real estate market will continue with the same boom this year.

• Dubai’s mid-market property sales next to flourish, says Damac
• China the ‘wild card’ for Dubai property sales, says Damac
• Sheikh Mohammed reveals phase 2 of Dubai 2040 plan

“Prices will keep rising unless any force majeure situation [like Covid-19] arises,” he said.

“The affordable sector will go up about 10-to-15 percent and luxury will go up 25-to-30 percent, because the number of people coming to invest in Dubai is huge.” 

Budget rental apartments in Dubai’s prominent areas increased between 2 and 21 percent last year, according to a report published by Bayut & dubizzle. District 10 in Jumeirah Village Circle was the most preferred off-plan development, where prices of a studio apartment in Danube’s Elitz project started at AED599,000 ($163,000).

Sajan said that the real estate market demonstrated remarkable resilience as it registered growth amid the coronavirus pandemic, recording a total of 84,772 sales and mortgage transactions worth AED300 billion in 2021. This is a 65 percent increase in the number of transactions and up 71 percent in values compared to 2020.

He added that records are “definitely going to be broken” in 2023, even in a climate of rising interest rates and higher inflation around the world.

Although growth is likely to slow in the GCC, the International Monetary Fund has said that the UAE will be the fastest growing Gulf economy this year at 4.2 percent, down from 6.5 percent in 2022.

And Sajan does not envisage demand being dented in Dubai, despite the bleak global outlook.

“There’s not going to be any major impact of a recession here,” he said. 

“Investor confidence may go down slightly for a while. But, overall, for people who have money, Dubai is giving them all the confidence to come and invest.

“It will be a V-shaped recovery in case something happens, but I don’t think we’re going to see that in the UAE.”

Demand has continued to be boosted by the ongoing influx of Russian and European expats seeking refuge from geopolitical instability and high net worth expatriates choosing Dubai as a part or full-time location.

The golden visa benefits and a growing trend of existing residents investing in property has also lifted the market.

Sajan said that he was not seeing a reduction in demand for affordable property “because the price of property is much lower compared to other parts of the world”.

“So even if the interest rates have gone up, it still costs much less than what’s in the other markets.”

Last month, Damac Properties announced that it is also shifting its attention to affordable housing. “People have forgotten the mid-segment: we now expect to see the mid-segment really boom,” Ali Hussain Sajwani, managing director of operations and technology at Damac Properties, said.

With the launch of Elitz, Danube Properties’ development portfolio exceeds 8,779 units, with a combined sales value exceeding AED6.75 billion.

“I would say don’t be late in investing,” Sajan said, likening the current state of Dubai’s real estate sector to Mumbai’s upscale Bandra coastal suburb three decades ago, which is now home to Bollywood celebrities like Shah Rukh Khan and Salman Khan.

“In Mumbai, if my father would have invested 25 or 30 years ago in a property in Bandra, that would have been worth six times today.

“The same thing is going to happen in Dubai, because Dubai has a very small land bank. This is going to be exhausted very soon. Once it’s exhausted, the price is going to go way higher.”