Dubai's property market is set to undergo significant changes. Thus, the Dubai Land Department has set a course on tokenisation to make housing more affordable. This will attract new investments and give an impetus to the development of the market. This is very relevant, given that according to official data, the return on Dubai real estate is one of the lowest in the world.
The Essence Of The Real Estate Market Tokenisation Project
It is believed that the new policy will allow small investors to buy luxury properties in Dubai. Tokenisation involves the use of blockchain technology. Each asset is divided into shares according to the investor's budget. As a result, it is possible to buy in instalments rather than a villa or flat in its entirety. Here's how it will work in practice:
- you no longer need to have a huge amount of money to buy a property, you can enter the Dubai property market with 10,000 euros;
- you can buy almost any kind of property: a budget apartment in Dubai or a luxury villa;
- blockchain guarantees complete security and transparency of the transaction.
According to preliminary data, the minimum share of property ownership will be 1%.
Why It's Needed
At the moment, Dubai's property market is stagnant. Developers need money to continue building, but bank loans have become more expensive. There is also an increase in the cost of building materials. As a result, the cost of housing is constantly rising, so fewer investors are willing to buy housing in Dubai.
Tokenisation can solve several problems at once:
- Attracting small investors. The government expects a significant influx of investment from small players who cannot afford the asset in its entirety but would be happy to acquire part of it.
- Transactions will be conducted via blockchain, so one's share can always be sold. With property values in Dubai rising strongly, many potential investors are expected to enter the market.
- Construction companies will have an alternative source of financing. Tokens instead of bank loans will reduce the cost of finished property, as they will not have to pay interest to banks.
- Increase in the pace of construction. Increased supply in the housing market will also allow to reduce prices slightly. But this is debatable due to the fact that demand will increase due to small investors.
This project is primarily aimed at elite and commercial property. Commercial space provides stable additional income from rent, and luxury housing is growing in price faster than budget housing, especially during the crisis.
In a couple of months, the first objects available for purchase for tokens will appear in Dubai. If you want to buy a property here, contact our manager. He will make an individual selection for you and advise you on all matters. With us, you will become the owner of a full-fledged asset or part of it quickly and safely.
