The first half witnessed residential real estate transaction volumes up 60% with an 85% increase in the value of the property sold, property consultancy Betterhomes revealed in its report.

India, the United Kingdom, Italy, Russia, and France, remained the top buyers, as per the report.

Subsequently, Canada, the United Arab Emirates, Pakistan, and Egypt were in eighth place, then Lebanon and China remained in ninth and tenth places respectively.

Demand was increased by geopolitical uncertainty in Europe and mortgage buyers looking to get in before well-telegraphed interest rate hikes as central banks tackle inflation, Betterhomes added.

Media reported earlier this year that Russians were pouring huge money into Dubai real estate as they seek a financial haven in the wake of Western agreements with Moscow over its invasion of Ukraine.

“The market has faced growing headwinds in the form of rising interest rates and a strengthening dollar but has so far proven to be robust with little sign of slowing,” Betterhomes said.

Moreover, during the first half of the year, a record 37,762 units were sold, and the total transactions in the residential property market amounted to almost 89 billion dirhams ($24.23 billion), it added.

Dubai’s property market started recovering from 2020’s critical downturn early last year with buyers snapping up luxury units as the emirate reduced pandemic restrictions faster than most cities all over the world.

In October, S&P Global Ratings stated that Dubai’s real estate recovery was crumbly and uneven, and an oversupply of residential properties would cause pressure on the prices in the long run.

Luxury property transactions went up 87% against the first half of last year, however, apartments made up 62% of all transactions, Betterhomes said.

Furthermore, investors ruled sales, making up 68% of all buyers, up 10% agaisnt a year earlier.

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The document unveils that net FDI in the real estate sector dropped by $6 million during FY22. The outflows were registered at $9.3 million as compared to the inflows of $3.3 million during the same period.

The document also highlighted the performance of the construction sector during the previous year. The total FDI in the construction division stood at $79.4 million in FY22 as compared to $155.4 million in FY21. In addition, the inflows were reported at $87.7 million, whereas outflows of $8.3 million were seen during FY22.

The net FDI in these areas witnessed a drop even though the government has initiated different real estate projects to provide quality and affordable housing to the middle and lower middle class. Some of these projects comprise Naya Pakistan Housing Scheme, Mera Pakistan Mera Ghar, etc.

According to the recent PIDE study, at present, Pakistan has a backlog of around 10.3 million housing units.

Meanwhile, former Chairman of the Association of Builders and Developers (ABAD) Arif Jeewa, while talking about the development told the media that there are several reasons for the decline in FDI in the real estate sector. He stated that the overall hyperinflation in the country and the rise in the cost of materials in the past two years have caused problems for the real estate sector.

Moreover, the government has also built up tax rates on real estate which eventually triggered the situation.

Arif Jeewa further stated that the policy discount rate has also been increased to 15 percent, which is also a factor in discouraging investment in the real estate sector.

On the contrary, the country witnessed an increase of 2.6 percent in FDI, last week, to reach $1.87 billion during the financial year 2021-22, which included the power sector followed by the Financial Business, Oil & Gas exploration sector, and communication.

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