As years go by, the UAE real estate sector continues to establish itself as a highly vibrant and dynamic market. More than two years after the COVID19 pandemic and its dramatic impact on the global economy, analysts predict that residential real estate prices in the UAE will continue to rise in 2022 supported by the governmental Economic Support Scheme and a stepped-up vaccination campaign that has sped up the recovery from the coronavirus-caused slowdown.
Taking a broader view, according to a recent CBRE report, the UAE’s GDP is forecast to swell by 7.0% in 2022, up from the 6.1% growth forecast published in the first quarter. Furthermore, the same report estimates inflation to rise by 5.6% for the year.
These numbers will undoubtedly impact the price trends in the UAE real estate landscape, as we shall see.
A thriving market in 2022
The year 2022 brought a flourishing real estate market across the country. Talking about the residential sector, the CBRE report states that residential property prices increased by 2.2% by June 2022 as average rents saw a 0.1% increase over the same period. In terms of sales, off-plan and ready sales transactions volumes have soared by 36.5% and 30.5% respectively towards the 2nd quarter of the same year.
On another note, according to Gulf Today, the best performing areas in Abu Dhabi over the past six months are as follows:
- Yas Island with over AED1.8 billion worth of transactions.
- Al Saadiyat Island with over AED1.2 billion in transactions.
- Al Shamkha with over AED1 billion in transactions.
- Al Reem with over AED872 million, and finally
- Khalifa City with approx. 310 million.
We can see a similar picture in Dubai as well. When crunching the numbers, we can see clearly that Dubai’s real estate market thrived greatly during the first half of 2022. For example, the real estate market had record-breaking growth with over 43,000 sales transactions valued at more than AED114.5 billion during the first half of 2022, as opposed to 27,373 sales transactions valued at AED61.97 billion in the first half of 2021.
June alone saw around 8,800 real estate transactions totaling AED22.69 billion, a 42.6 percent increase in sales and a 55.4 percent increase in value compared to the same month in 2021. This development demonstrates the UAE’s resilience in the wake of the epidemic and the vital role Dubai’s real estate industry played in the diversification of the country’s economy.
The top areas for investment
The investment race witnessed intense activity across several areas in the country. For instance, Dubai had a 74% y-o-y increase in overall residential sales to 56,600 units. Meanwhile, overall transaction value hit USD 35 billion, an all-time high since the 2008 financial crisis, according to a recent Savills report. With these numbers in mind, the report states that Dubai’s residential market “not just outperformed its past activity levels but was among the best-performing markets globally.”
Going into the details, the Savills property report outlines this demand over the different categories.
- In terms of villa/townhouse developments, for instance, this demand was concentrated around projects such as Koya Oxygen (1,100 units), Damac Hills (730 units), Villanova (1,114 units), MBR City (2,070 units), Tilal Al Ghaf (1,603 units) and Arabian Ranches Phase 3 (1,200 units).
- When looking at transaction activity for apartments, the transaction activity was primarily concentrated around MBR City and Business Bay (4,080 units each), Dubai Marina (3,400 units), Jumeirah Village Circle (JVC) (3,290 units), Jumeirah Lake Towers (JLT) (2,450 units), and Downtown Dubai (2,430 units).
In Abu Dhabi, we can see a similar trend. According to the Savills report, the city is undergoing a significant transformation by introducing new hospitality and family entertainment concepts. This has pushed higher demand for residential units across Abu Dhabi.
These numbers indicate that the real estate market, especially in Dubai and Abu Dhabi, is flourishing as it is steadily recovering from the ramifications of the COVID-19 pandemic. This comes from a systematic governmental strategy for stimulating growth in the real estate landscape across the country.