The Qatar World Cup will provide Dubai’s Luxury Market with a Boost.
The Qatar World Cup will provide Dubai’s Luxury Market with a Boost.
The 2022 World Cup will boost Dubai’s luxury property market and is expected to stay that uplift for a while.
World Cup is being held First time in the Middle East:
World Cup is being commenced for the very first time in the Middle East; it will commence from Nov.20 to Dec. 18 in Qatar. Since limited accommodation is available, many fans will be occupying properties in nearby cities such as Dubai. This will lead to an increase in luxury real estate sales in a hot market that is leading the world in housing price gains.
Due to the impact of the event, it is attracting plenty of high-net-worth individuals. Many people are asking about accommodation options as well as investment options. They are interested in the new projects that are being launched in Dubai.
The count is about 1.5 million fans expected to participate in the tournament in Qatar. Fewer accommodations means the rest of the people are expected to stay in the UAE- primarily in Dubai.
Flydubai and Qatar Airways will be flying up to 54 one-hour flights between Dubai and Qatar, allowing the fans to fly out for one match and return the same day.
Even fans deciding to stay in Qatar are expected to spend some time in other destinations, with the visitors planning to spend two nights in Qatar and then two nights in another Gulf country, rising by 16 times as compared to pre-pandemic travel patterns according to statistics.
Dubai benefits the most because of this trend, capturing 65% of onward visits.
“People will come here, stay in hotels or Airbnbs, they’ll go and watch the matches, come back and spend two or three extra days, and that will make it easy for them to consider Dubai as an investment for property,” quoted Shabna Ibrahim, one of our investment consultants at A1 Properties.
Tourism that has been connected with the World Cup is expected to provide a big boost to Dubai’s hospitality sector, including the short-term rental market; the property consultants are also expecting an impact on luxury-residential real estate, which has seen a boom since the onset of a pandemic, with prime properties in some areas almost doubling in price.
The historical transactions during heavy tourism times have depicted that a large number of visitors coming to Dubai that end up investing in real estate after experiencing luxury, safety, security, a comfortable lifestyle, and the tolerance and diversity of the city.
The tournament is expected to boost Dubai’s real estate sector, similar to Expo 2020, a world event that ran from October 2021 to March 2022 and increased international tourism by 214%. Attracting about 24 million visits to the event, according to government data.
But with luxury real estate making up 5% of Dubai’s real estate market, World Cup-related sales are not likely to have a huge impact on the market overall.
Tourism boosted by the six-month-long Expo was on a much bigger scale than World Cup. As far as Dubai is concerned, there will be an impact, but will it be significant or not? Only time will tell.
The impact will be less because Dubai has already seen a high increase in prices and demand for prime and ultra-luxury properties over the past two years after an initial dip during the early months of the pandemic. There was a clear trend of investors and end users choosing larger homes: Villas, townhouses, or larger apartments.
Growth slowed a little from 2021 to 2022, but the prime real estate sector increased by 88.8% in the 12 months through September this year. Prices in the Jumeirah Islands have risen to an average of 96% since the 3rd quarter of 2020. In Palm Jumeirah, where most of the city’s mansions are positioned, prices rose by an average of 90%, and Downtown Dubai saw a price increase of 87% in the prime sector.
International investors have come back to the market in the last year because of the visa reforms that have been introduced by Dubai, expanding them in November 2020 to grant five or ten-year residency permits to investors also to anyone investing more than AED 2 million in real estate, entrepreneurs and certain professionals.
Rental prices have also increased sharply since the pandemic. Average apartmental rents were up to 24.9% year-on-year in August. However, they remain 20% below the last peak in 2014. The increasing rent is boosting sales because instead of paying rent every month, it is better to take out a mortgage.
While the strengthening of the US dollar has given an advantage to some buyers, the weakening of the euro has lessened the purchasing power of others, so it is important to understand the global impact of currency on the Dirham.