Dubai Property Market
The Dubai property market continues to rise despite the fear of increasing global inflation. The Dubai property market has had a year of rapid growth as the UAE economy recovers from the coronavirus crisis with various initiatives such as reforming the country’s golden visa.
Monthly rent growth has slowed for the third consecutive month, suggesting that we could see rent growth to moderate in the not-too-distant future.
Villa rents in Emirates Hills in August increased by 4.7% month-on-month. While villa rents in Victory Heights increased by 4.3% year-on-year.
Apartment rents have increased in all city areas except for the Dubai International Financial Centre, Dubai Sports City and the Dubailand Residence Complex. Real estate prices in Dubai have continuously increased in prime locations over the past few months.
The Dubai property market continues to rise despite the fear of increasing global inflation.
Dubai Property Market Sales Prices
While many international markets are still emerging from past/recurring COVID-related embargoes and restrictions, the Dubai economy has made great strides. This economic recovery, fueled by a rise in oil prices and a resurgence in tourism and trade, led to exceptional trading figures (both in volume and value) for the year’s first half, especially about VEFA. Sales of high-end/luxury apartments also increased markedly.
In fact, according to the recent Henley Global Citizen Report (2022), 4,000 high-net-worth individuals (HNWIs) are expected to move to the UAE this year due to the economic, social, State-of-the-art laws and regulations that facilitate business, investment and residence. The average selling price of apartments, villas and offices increased by 4%, 4%, 2%, 20%, 26% and 19% in one year.
While demand for unplanned real estate has increased significantly, rising borrowing costs and lack of affordable housing in the secondary market have begun to crowd out investors and end users with capital/ more limited resources.
There was also a change in payment plans for unplanned properties, as instalments and construction-related payments increased while payments on completion were reduced.
However, due to recent and future interest rate hikes, developers should switch to more flexible payment plans to avoid losing end users and first-time buyers who have accounted for major investors in the past two years, especially as the population of Dubai increasingly adopts a long-term vision of life in the emirate.
Dubai Land Department : Dubai Property Market
Dubai Land Department has made all real estate data publicly available, a sign of a mature market, which will improve transparency in the real estate market and facilitate transactions. Substantial foreign investment is expected to continue thanks to cutting-edge business reforms, government initiatives related to the Golden Visa, and efforts to transition to a highly-driven economy. The UAE company has updated its regulations on long-term visas, indicating that it is possible to get a golden visa (10 years) when buying real estate for AED 2 million. The Dubai property can be completed, or unplanned, and specific local banks can mortgage it. End consumers and investors flocking to the real estate market drive the price increase.
Dubai property prices in prime locations have skyrocketed in the past month. In some places, like Palm Jumeirah, prices have increased by more than 100% since the start of the pandemic.
Most international buyers are attracted to Dubai’s wonderful sandy lifestyle, which tends to accompany the purchase of villas, and this is where demand continues to grow. The city set a new price record by selling an $82 million home in Palm Jumeirah. At around AED 3,200 per square foot, or about $870 per square foot, the Prime Residences in Dubai remain among the most affordable in the world. This, combined with the high quality of housing products currently available at the high end of the market, strengthens Dubai’s position as one of the world’s leading second-home markets.
Prime properties are expected to be around 60-80% higher than in 2021. Prices in Palm Jumeirah have increased by 101%, while prices on Jumeirah Bay have increased by 98%. With global economic uncertainty increasing, Dubai has again emerged as a safe harbour during the storm. It is the most business-friendly environment and arguably some waterfront real estate.
Dubai has performed better in the remainder of 2022, and factors in its favour include continued positive policy changes. The latest is an additional benefit for long-stay visa holders, allowing residents to enjoy preferential treatment and a high quality of life at their fingerprint. Despite geopolitical tensions, global inflation, and rising oil prices, sale transactions in Dubai’s property market reached nearly Dh 160 billion in the first eight months of the year. Some impact is undeniable. As Dubai solidifies itself as a global business and tourism destination, the impact is expected to moderate with various visa initiatives and various properties appealing to different buyers.
Indeed, the UAE is a global nation ready to welcome people from all countries, allowing more people to migrate here and start new businesses to call home. The way the country offers its residents everything from lifestyle to luxuries fosters a mood of light and contentment among expats looking to live and invest in the country.
Dubai Property Market Rental Rates
Regarding apartment values in Dubai, rents have grown rapidly, benefitting from the broader lifestyle tendencies visible in different markets. The rental fee boom persevered with the same momentum recorded over the past year. The Average quarterly increase was 4% for residences, 6% for villas and 3% for offices, while the annual boom stood at 15%, 23% and 13%, respectively.
Demand for large unit types, particularly villas and townhouses, with usable out-of-door regions (i.e. balconies and gardens) and a robust network, remained the focal point for residents.
The first half of 2022 recorded some successful and memorable undertaking launches. These launches were made in the wake of renewed optimism within the actual property marketplace, buoyed by a strongly acting secondary marketplace. Many Tier-1 builders have sought to capitalize on those tailwinds, freeing many of the latest initiatives. The nice marketplace situations, coupled with improved transport of infrastructure and centres throughout grasp plan communities, have additionally caused many Tier-2 builders to revisit the feasibility of their former initiatives on hold.
However, growing creation expenses and delivery chain troubles constitute growing dangers for builders and could delay initiatives at pre/early levels of creation. Nevertheless, for initiatives that might be properly progressed, delivery aspect constraints are probable to be much less of a hindrance.
Indeed, in many instances, initiatives were bought with creation milestone linked (buyer) price plans, incentivizing builders to finish initiatives on or beforehand schedule. Undoubtedly, builders are also eager to reinvest their income into undertaking launches as quickly as viable to capitalize on winning marketplace situations.
According to the CBRE, Deira is the most low-priced area to lease a villa, with a median lease of AED112,737. This, too, represented a 3.5% increase. Upmarket Jumeirah, meanwhile, noticed a climb of 4.8% (to AED500,635).
Demand to shop for houses and lease in Dubai is booming because the government’s coping with the pandemic and liberal visa rules appeal to extra overseas shoppers and residents. The emirate’s actual Dubai property marketplace benefits from an inflow of newbies consisting of bankers fleeing strict COVID regulations in Asia, crypto traders and rich Russians escaping their sanctions-hit us after it invades Ukraine.
Rentals for residences at the city’s artificial island, Palm Jumeirah, reached the best stage at 231,397 dirhams in common. Other excellent top-class places for Dubai rents consist of Emirates Hills, wherein the common lease is AED879,077 and at the alternative give up of the spectrum is The Springs, wherein the common lease is an extra low-priced AED166,724. Rates are growing at the quickest tempo ever, making the gulf between middle and secondary regions a great deal more pronounced.
Conclusion
Dubai’s real estate market has seen large-scale deals in the luxury segment not seen in the last decade. The government has launched a new initiative to relax stay rules by offering golden visas, investor visas, extension of stay after expiration, etc., to attract more investors and end-users.
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