A recent study indicates a significant shift in Dubai’s real estate landscape, with many tenants eager to transition from renting to homeownership in response to rising property prices. According to a market analysis by Betterhomes, approximately 66% of surveyed tenants plan to purchase homes in the emirate within the next six months, signaling a potential surge in demand.
Investors are also keen on acquiring additional properties in Dubai, driven by the desire for capital appreciation. The report highlights that the rising rental costs and the aspiration for ownership are compelling lower- to middle-income tenants to buy homes, while high-income investors focus primarily on capital gains.
Millennials represent the largest segment of potential homebuyers, with 56% of those surveyed aged between 28 and 43 expressing a desire to buy property. This demographic is followed by 29% of Generation X individuals, aged 44 to 59. Key motivations behind this trend include the need for secure tenures, more living space, and shorter commute times, pushing tenants to seek their ideal homes as quickly as possible.
The most sought-after neighborhoods among both investors and tenants include Dubai Hills Estate, Dubai Marina, and Downtown Dubai, followed closely by Business Bay and Arabian Ranches. Notably, the majority of prospective buyers (66%) are not high earners, with monthly incomes below AED 50,000. Investors reported an average monthly income of AED 45,616, while tenants averaged AED 32,303.
Price Trends and Space Needs Drive Homeownership
The anticipation of increasing property prices is a major factor driving tenants to purchase homes sooner rather than later. The study reveals that 42% of tenants predict a 5-10% rise in housing prices over the next year, with 30% expecting even greater increases. Only 10% believe prices might decrease in that timeframe.
Richard Waind, CEO of Betterhomes, emphasized that security, space, and quick access to amenities are paramount for those currently renting. The desire for more bedrooms, including guest and maid rooms, walk-in closets, dedicated workspaces, gyms, swimming pools, children’s play areas, and green spaces within communities are all critical features prospective buyers seek.
Commute Times Influence Home Buying Decisions
The study also identifies commuting time as a crucial factor in the decision to buy a home. About 60% of prospective buyers are looking for properties within a 15-30 minute travel radius from their workplaces. Waind noted that the average desired commute time is around 23 minutes, although achieving this in Dubai can be challenging.
Moreover, millennials express a strong need for additional storage space, which they often find lacking in their rented homes. The Betterhomes study shows that a substantial majority of prospective buyers—72%—have lived in Dubai for over five years, with an even larger percentage, 89%, intending to stay for at least another five years. This stability further underscores the growing inclination toward homeownership in the emirate.
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