Yemi Olakitan
Despite the worldwide economic downturn, high-net-worth individuals, especially Nigerians, invested in Dubai, boosting the luxury market and setting a new record of 90,881 residential sales in 2022.
According to CBRE, the overall amount of transactions in Dubai reached 8,662 in December 2022, up 63% from the previous year.
Off-plan sales rose 92.5 percent and secondary sales 35.4 percent.
2022 smashed several residential market records in Dubai.
Almost 10,000 residential transactions exceeded the 2009 high.
In 2022, apartment and villa rents rose 27.1 percent and 24.9 percent, respectively, reaching historic highs.
In December 2022, average property prices jumped 9.5 percent and average apartment prices rose 9.0 percent, according to the data.
Average villa prices rose 12.8% throughout the same period.
Dubai's average apartment and villa prices were $318 and $377 per sqft in December 2022.
The average apartment and villa prices are 21.5 percent and 4.2 percent below the 2014 record highs.
Palm Jumeirah's villa sales rate per square foot is $1,067, whereas Jumeirah's apartment sales rate is $632.
Rents rose 26.9% in 2022. Average apartment and villa rents rose 27.1 and 24.9 percent, respectively. The Palm Jumeirah has the highest annual apartment and villa rents at $67,644 and $277,000, respectively.
Dubai's strong economic growth has driven demand for residential and commercial real estate, according to a JLL poll.
Foreign investment in real estate has grown due to the government's programmes and laws.
Dubai Land Department (2020) announced real estate sales above AED 257 billion.
Dubai's tax rules and reputation as a global business and tourist hub have also helped its real estate market.
The numbers show that Nigerians invest heavily in Dubai real estate.
Nigerian investors were fifth in the Dubai real estate market in 2018, with 1,092 deals worth AED 4.6 billion (roughly $1.25 billion), according to the Dubai Land Department (Dubai Land Department, 2018).
This shows that even though there were fewer transactions than in other countries, their value was still high.
Nigerians were the second-largest foreign buyers in Dubai's real estate market in 2019, with 1,824 deals totaling AED 7.2 billion (roughly $1.97 billion) (Dubai Land Department, 2019).
The volume and value of transactions increased significantly over the previous year.
These figures show that Nigerian real estate investment in Dubai is growing.
Dubai apartment sales drive the market.Villas and townhouses remain popular.
Location, price, and facilities might affect the appeal of city home styles. Most properties are multi-use and holiday rentals.
Real estate specialists, notably estate surveyors and valuers, claimed Nigerians are driven to the Dubai real estate market due to its security, stability for investment, and low property prices compared to other large cities.
Dr. Samson Agbato, Director, Faculty of Environmental Studies, Moshood Abiola Polytechnic, Ogun State, said: “One aspect is the reputation of Dubai as a secure and reliable site for investment, which is particularly enticing to Nigerian investors who may be searching for a shelter for their wealth.
Dubai is a global business and tourist hub, offering many alternatives for Nigerian investors seeking a stable and growing city.
An estate surveyor and valuer, Agbato, also attributed Dubai's appeal to its low property prices compared to other large cities.
“This may make it cheaper for Nigerian purchasers to acquire property in Dubai, which leads to better returns on investment,” he said.
He said: “Dubai's solid economy, stable political climate, and cutting-edge infrastructure may attract wealthy Nigerians to real estate investments.
Dubai's status as a global commercial and tourist hub may also attract real estate investors.
The city's tax-free status and lack of foreign property ownership restrictions may attract wealthy Nigerians.
Dubai's real estate industry attracts international investors due to its high returns on investment and possibilities for capital gain.
Ademola Adetola, ACMV Secretary, said high-net-worth Nigerian investors are fleeing to Dubai due to the naira's depreciation.
The naira's fall makes Nigerian investors important.
He said informed investors seek to avoid portfolio and capital value losses.
"The city's real estate has continued to remain solid and steady, bucking global markets slowdown and recession trend," he said.
The current epidemic, rising taxes, cost of living problem, natural disasters, and Russia-Ukraine war have driven many citizens seeking protection for their families and businesses to travel to Dubai, the top destination for high-net-worth migrants.
Dubai's world-class education, healthcare, security, and property ownership make it appealing.
According to the UBS Bubble Index, the city gives investors one of the finest global values.
The city has benefited from increasing oil costs, which are driving worldwide inflation, and cash purchasers make up more over 70% property purchases, according to Better Homes data.
He added that the international character of the business caused property values and prices to soar in the city, yielding 6.5 percent average rental returns despite meltdowns in most other countries.
Emeka Okoronkwo, Principal Partner of Emeka Okoronkwo & Associates, remarked that established and stable structures attract economic investments. It determines expected returns.
The Dubai design was well thought out, and all funnels that will produce traffic to sustain and yield predicted returns in their real estate industry are effective.
They developed a globe tourism thrill centre with a supportive airline and visa system and time-share property ownership.
Since they appreciate, Nigerians invest a lot on them.
"It generates enough returns and affords them a lifestyle they can enjoy more easily than in Europe or America," he continued.
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