Dubai‌ ‌Property‌ ‌Market‌ ‌Trends:‌ ‌forecast‌ ‌for‌ ‌2022‌

The UAE economy is showing a stable growth of 3.1% in 2021 after the COVID-19 pandemic. The rapid recovery was influenced by important government initiatives, such as the national vaccination programme and the subsequent reduction of restrictions. These actions not only increased the number of tourists and restored trade volumes, but also contributed to stable growth in the real estate sector in 2021.

According to data from the DLD, the number of property purchase and sale transactions has increased to 55,600 this year. The volume of real estate deals in 2021 exceeded the 2020 figure by 88% and is already the highest annual sales figure since 2014. We have prepared information about the Dubai property market in 2021 and the expected trends for 2022 in this article.

Based on many indicators, 2021 was a very successful year for the Dubai real estate market as the number of transactions and their value amount increased significantly compared to 2019/2020. Since the beginning of 2021, the total number of purchase and sale deals has reached 55,640 to the amount of AED 135B (USD 37B), according to the reports of the state DLD website for November 2021. This was influenced by several factors:

• Dubai has entered the TOP 5 best cities in the world according to the reports of the Resonance Consultancy.
• Economic recovery after the COVID-19 pandemic.
• Holding of the Expo 2020 international exhibition, which has attracted more than 8 million visitors to date.
• Dubai ranked 1st in the world in the UN rating on resilience to external influences due to the fact that the emirate develops long-term strategies for managing all types of risks.
• The launch of new projects from reliable Dubai developers such as Emaar, Meraas, DAMAC, Select Group, Meydan and many others.
• Reduction of the real estate pricing threshold for obtaining a 3-year residency visa by foreign investors from AED 1,000,000 (USD 272,300) to AED 750,000 (USD 204,200).

Purchasing real estate in the emirate of Dubai attracts future residents and investors due to its high payback rate of 5-8%, as well as the cost of residences, which can be affordable for people with different income levels. Another reason for the attractiveness of buying property in Dubai is the large number of freehold zones in which foreign citizens can purchase real estate with full ownership. And, of course, the property remains the most stable way of investing, as it is constantly growing in price.

Apartments are the most popular type of real estate to purchase in Dubai. In 2021, about 60% of the total number of all purchased property in the emirate were apartments. Buying apartments offers many advantages; there is a great demand from tenants, a wide selection of residences of different sizes, different costs and locations, as well as a profitable option for investment –the ROI of apartments in Dubai reaches anywhere between 5-8%.

The most popular areas to buy residences in 2021 include Business Bay, Jumeirah Lake Towers, Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Dubai Harbour, Dubai Creek Harbour and Mohammed bin Rashid City. It should be noted that the purchase of off-plan apartments is very popular as well as this is indicated by the graph from the Property Monitor website for April-September of this year. In addition, off-plan real estate was more popular than ready-made in the summer months. This trend is explained by the launch of new projects, additional bonuses from developers and a flexible phased payment scheme.

Apartment price growth trends are observed every quarter: AED 1,263,000 (USD 344,000) for the 1st quarter and AED 1,914,000 (USD 521,100) for the 4th quarter. The most expensive apartments are located in the following districts: City Walk, Palm Jumeirah, Dubai Festival City and Dubai Hills, where on average, prices range from AED 2,070,000 (USD 563,600) to AED 2,860,000 (USD 778,700). In the Dubai Residence Complex, International City and Discovery Gardens, you can find more affordable apartments where prices start from AED 275,000 (USD 74,900).

Another change in 2021 is the increased demand for more spacious and secluded housing, like villas and townhouses. This trend is associated with the COVID-19 pandemic, which saw the desire for people to have more personal space and amenities such as a private pool, garden or terrace. Moreover, many villas and townhouses are situated in closed communities, in which all conditions for comfortable living are created. There are sports and playgrounds, parks, places for family recreation, social institutions and much more located in closed residential developments.

In 2021, many complexes were sold out in a few days or even hours after the announcement of the start of sales. Among them are Murooj Al Furjan, Jebel Ali Village, Tilal Al Ghaf as well as some others. In addition, new projects were launched, including Arabian Ranches and DAMAC Lagoons. All this confirms the great demand for this type of real estate.

The most popular areas for the purchase of villas and townhouses were Dubai Hills Estate, Arabian Ranches 3, DAMAC Hills 1 and 2, Tilal Al Ghaf and Al Furjan. These communities guarantee the most comfortable accommodation and high rates of return on investment. In this case, there is a great demand for ready-made real estate, although we saw an almost 50/50 split when it came to off-plan and ready units that made up the total number of transactions as of September: ready-made - 716 units, while off-plan - 601 units.

In 2021, villas and townhouses also rose in price. In the 1st quarter, the indicator was at AED 2,442,000 (USD 665,000), and in the 4th quarter the level had reached AED 2,496,000 (USD 679,600).
Buyers in the process of searching for luxury real estate options of this type paid special attention to areas such as Jumeirah Islands and Palm Jumeirah Fronds - Garden Homes. The cost of real estate here varies from AED 6,200,000 (USD 1,688,000) to a record AED 16,336,000 (USD 4,448,000). More affordable properties are located in Reem Townhouses, Jumeirah Village Triangle Villas, Dubai South Townhouses and Town Square Townhouses, where real estate costs on average from AED 1,530,000 (USD 416,600).

There are many types of commercial real estate on the Dubai market: shopping malls, warehouses, offices, co-working spaces, land plots, shops, work settlements, buildings and even factories. A wide range of commercial property for purchase or rent attracts business professionals working in different sectors of the economy or those who want to get the most out of buying an asset.

After the effects of the COVID-19 pandemic, the commercial real estate market in the emirate is also recovering. In 2021, this sector accounted for about 9% of all real estate in Dubai. The annual sales volume amounted to 2,400 units worth AED 2.7 billion (USD 7.35 million), and the number of transactions exceeded the figures from 2016.

The biggest amount of commercial real estate was sold in the districts of Jumeirah Islands, Jumeirah Park and Business Bay. Deals were also frequently made in MBR City, Nadd Hessa, Downtown Dubai, Al Warsan First and Barsha Heights.

The residential real estate rental market in Dubai has also shown continued growth. According to Zoom Property Insights, in the 3rd quarter of 2021 there was a 14% increase among affordable properties and 30% in the elite segment. Rental demand continues to increase in the 4th quarter. Now there are more than 10,000 offers on the Dubai real estate market, due to which any tenant will find it easy to choose an option that suits them.

Coastal areas are the most popular places for short-term rentals. This includes Palm Jumeirah, Dubai Marina and Bluewaters Island. Dubai Silicon Oasis, Jumeirah Village Circle (JVC), Bur Dubai and Al Nahda are popular districts for purchasing long-term properties.

As for prices, Palm Jumeirah has become the most expensive area for renting all types of residential real estate. Renting apartments in this district will cost an average of AED 165,000 (USD 44,900), while villas cost AED 648,000 (USD 176,500). The most affordable apartments for rent can be found in Discovery Gardens or International City as prices here start from AED 22,600 (USD 6,100). If you are considering buying real estate in this emirate to further rent out to tenants, then we recommend you to read our article on the topic of return on investment in Dubai real estate, which contains detailed information about investing in this segment.

Experts primarily predict improvements in the economy with an increase of 4.2%, although the Central Bank of the UAE stopped at 3.8%. The key reasons for the growth are visa reforms, high standard of living and affordable prices. Attraction of foreign and local investors is also one of the main incentives for economic development in 2022. If you want to move to Dubai, here you can find all the main points that a foreign citizen needs to know when moving to this emirate.

Positive changes are also expected in the real estate market as prices have increased by 20% compared to the period of the financial crisis in 2010. Residential property costs will rise to 5%, although only 2.5% growth was predicted until recently, according to a survey of 11 Reuters expert analysts. It is also assumed that prices should increase by another 5% in 2023. According to 9 analysts, the availability of housing in Dubai will increase over the next few years, thanks to which, even more investors will come into the emirate's real estate market, and the number of transactions will rise.

The issue of rental cost is also being discussed in a positive way. According to Asteco forecasts, the growth will be 7-9% for residential and commercial real estate in the 1st quarter, while the growth for premium properties will be 9-14%.

It is assumed that the demand for villas and townhouses will continue, due to which prices will rise as well. The year 2021 was the peak year across the last 7 years. Developers have picked up this trend and are building more and more closed communities, which consist of villas and townhouses. Communities will have all the necessary on-site amenities, so residents won’t have to travel outside their complexes to do everyday essential errands.

Demand for off-plan real estate is also growing, as a result of which developers in Dubai plan to increase the volume of construction. According to the Dubai Residential Market Review, by the end of 2021, about 100,000 housing units will have entered the market. It is expected that approximately 125,000 new units will appear by 2025.

Our company Metropolitan Premium Properties is a licensed broker and one of the leading real estate companies in the emirate. We cooperate with reliable developers in Dubai, such as Dubai Holding, Emaar and Meraas. Our specialists are certified by the Dubai Land Resources Department (RERA) and have extensive experience in organizing all types of purchase and sale transactions, searching for rental options, and obtaining mortgages. Our agents will offer you a variety of real estate options depending on your desires, both for living and for investing.

Another service that we provide is the management of the purchased property. Metropolitan Premium Properties specialists will prepare your real estate for leasing, find reliable tenants, draw up contracts, control timely payment, as well as collect rent cheques on your behalf. Help from a trusted agency will help you get the maximum return on your investments without wasting time, money and effort.