How will Dubai real estate sector perform in 2022?
Seeing the record-breaking performance of the Dubai real estate sector in 2021, we can expect a promising 2022. It is imperative to understand that the rebound and outstanding performance of Dubai real estate was not just a miracle but the credit goes to the UAE government for successfully rolling out coronavirus vaccination, initiatives to urge people to visit Dubai, and supportive reforms, which all led to a surge in demand for Dubai properties.
2021 – A record-breaking year for Dubai real estate
According to the Dubai Land Department (DLD), a total of 84,772 property transactions (worth AED300 billion) were recorded in Dubai real estate market in 2021. The number of transactions is grown by 65 per cent while a 71 per cent jump was recorded in the value of deals, as compared to 2020 statistics.
A majority of real estate experts denote the recovery to certain factors such as:
- Interest from the overseas buyers
- Record low-interest rates
- Limited supply of prime properties
- Attractive features of prime areas
Even though the UAE government has announced to levy a new corporate tax, the country is expected to be attractive for entrepreneurs and so this property market will also continue experiencing upward growth.
Dubai – A haven for people
The UAE government has managed the global pandemic in a commendable way, which added more to the appeal of this country, in general, and Dubai, in particular. All these measures resulted in boosting marketing sentiments and urged people to visit and invest here. According to Oxford Economics, the GDP of Dubai is forecast to expand and reach 5 per cent this year.
Real estate reforms coupled with foreign buyers’ interest in Dubai and low-interest rates will propel the Dubai realty market in 2022, in the right direction.
What will 2022 bring for Dubai real estate market?
Based on all these previously discussed measures, it can be said that 2022 will be another prosperous year for the Dubai property market. And a strong demand from both local and international investors is likely to push Dubai property prices higher more sharply than the previous year. By 2022, around 36,000 property units are expected to come on the market.
Though the demand for Dubai properties is higher but the plentiful supply in this year means that it will remain a buyer’s market this year and stay like it for a few more years.
Expo 2020 proved to be a catalyst of change
Due to Expo 2020, a surge is noticed in the demand for Dubai properties and a boom was experienced in property deals. The Dubai Land Department’s data shows that the values of real estate transactions until November 2021 were the highest sales figures since 2014.
Changed scenarios
And seeing the demand for Dubai properties amongst foreign investors, it is forecast that Dubai property prices will rise at a faster pace. A Reuters survey has also confirmed that property prices are likely to increase more sharply than the three months ago prediction.
According to the November survey, average house prices were expected to climb 7.5 per cent this year and 5.5 per cent next, compared to 5.0 per cent each.
“While improvements in the overall economy, along with the continued arrival of new residents, look set to support modest rises in residential sales prices and rents, a strong supply pipeline will likely limit the extent of market-wide uplifts,” Chris Hobden at Chestertons MENA said.
A majority of real estate experts also agree that the Dubai property market is likely to remain a buyer’s market, at least for the next couple of years. Mostly because, a large number of projects were either delayed or put on halt during the global pandemic, which is likely to be completed and delivered across Dubai in the next two to three years.
Dubai is an affordable real estate market
Moreover, Dubai property prices are lower as compared to other established global property markets, which makes it an affordable and attractive market for investment. And an oversupply of properties will keep this market affordable for a while yet. Given that Dubai will continue to be this way for a few years now, developers will also refrain from increasing property prices, significantly.
Conclusion
With hopes high about Dubai real estate market after Expo 2020, the property demand is expected to increase and so are the prices but the analysts agree to this connotation to an extent only, indicating uncertainty about market direction.
However, when the sentiments are positive and so is the growth and foreign demand, it is high time to be a part of this profit-generating real estate market. To include a Dubai property to your portfolio, contact the team HFRE at +971 4876 2473 or you can also write us at info@hfre.ae and one of our representatives will get back to you with several options and a bespoke investment plan.
