Dubai property market’s roaring comeback with record-breaking Q1 2022
With a property market that has crash-landed due to the regional downturn, there is a sign of recovery in 2022. Despite the market volatility, the demand for residential properties in Dubai has been on a hike, as property buyers and investors both are looking for a safe haven and promising returns from their investments. As per the Dubai Land Department (DLD) statistics, many records were set during the first quarter of 2022 in regards to the numbers of transactions.
Key facts
The residential market witnessed a record-breaking first quarter, as the total volume of transactions touched 7,865 in March 2022. These numbers are 83.4 per cent up from the same period, last year. Dubai off-plan property sales increased by 94.6 per cent and secondary market sales by 76.1 per cent in this quarter. The total number of transactions in the current year to March 2022 reached 19,009 and this is the highest total ever recorded in the first quarter of the year.
Global commercial real estate services and investment firm, CBRE Group, has reported that the average property prices increased by 11.3 per cent in Q1, 2022. Average apartment prices increased by 10 per cent, while the villa prices by 20.2 per cent.
Average apartment prices in Dubai reached AED1,118 per sq. ft. and average villa prices at AED1,267 per sq. ft. However, if these prices are compared to the market peak witnessed in 2014, these rates per sq. ft. are 26.2 per cent and 12.3 per cent for apartments and villas respectively, below the peak.
Despite the continued increase in the mortgage interest rates, Dubai residential market has yet to see its impact on transactional activity. It is the strongest start to the year in terms of residential transactions. Average property prices and average rents continue to increase, a moderate growth is observed in both sales and rental growth rates in the villa segment of the market.
Areas with promising growth
With average sales price of AED2,021 per sq. ft. Downtown Dubai displayed the highest average sales rate per sq. ft. in the apartment segment.
In the villas market, Palm Jumeirah showed the highest average sales price per sq. ft. and touched AED2,910 per sq. ft.
Rental market
Currently, the Dubai property market has been showing stronger rental returns. Palm Jumeirah showed the highest average yearly rents for apartments AED197,482 and Al Barari exhibited the highest average yearly rents for villas AED801,940.
The average rent soared by 13.1 per cent in the year to March 2022, with the average apartment and villa rentals rising by 11.7 per cent and 22.5 per cent, respectively. The average annual rentals for an apartment and a villa in March 2022 were AED80,000 and AED238,441 respectively.
Real estate experts state that a higher Return on Investment (ROI) is no longer associated with premium areas and high-end properties of Downtown Dubai or Dubai Marina but can now be achieved in newly developed suburban communities such as Arjan, Jumeirah Village Circle, Al Barsha South, and Arabian Ranches.
