Sales analytics for Dubai real estate market in 2022. Forecasts and first results

How does the real estate market feel in the largest city of the UAE – Dubai? Much better than it has been expected. Having recovered from the pandemic and experienced a sharp decline in performance, it remains one of the most attractive cities in the world to live in. In 2021, there were 84,196 real estate transactions registered in the emirate, amounted to AED 300 billion (USD 81 billion, about CNY 516 billion), an impressive sales result in the midst of a pandemic. According to forecasts, the home sales are expected to continue growing.

Real estate market in the UAE

Despite global anxiety and uncertainty caused by new variants of coronavirus, the UAE has been able to keep its economy relatively stable. Thus, according to preliminary data from the Dubai Statistics Center, the growth of the economic indicators in the country in 2021 was boosted by the revival of the hotel business, trade and real estate sectors.

The UAE housing market, weakened by oversupply and the pandemic, is gradually recovering. One of the reasons is that over the past two years, the number of people who can work and study remotely has increased dramatically. Cyril Lincoln, vice president and global development director of real estate finance and advisory, investment and agency services at Mashreq Bank, also points out that another factor supporting the demand for housing in the country is its appeal to digital nomads. This concept refers to those who lead a mobile lifestyle and work using digital technologies.

Some experts believe that the growth of the industry will continue. According to Hyder Tuaime, head of real estate research at the ValuStrat consultancy, the UAE real estate market will continue to operate in a “healthy mode”. He also believes that more and more foreign investors looking to buy housing will come to the country in 2022. This means that we can expect changes in real estate prices in the United Arab Emirates.

According to analysts, sales indicators will continue to grow this year in all sectors of the market, while residential real estate may face some difficulties. These include tightening loan terms and a likely increase in mortgage rates compared to 2021. Nevertheless, CBRE experts believe that transaction figures will remain high throughout the year.

Prices for apartments in the UAE in 2022 (in USD)

Price category Average apartment price Average price of a sq m Number of offers
Cheap properties up to USD 224,000 165,997 3,345 197
Luxury properties from USD 1,12 mln 3,794,544 31,976 506
All offers 1,337,556 11,887 2,027

Villa prices in UAE in 2022 (in USD)

Price category Average villa price Average price of a sq m Number of offers
Cheap properties up to USD 336,000 268,078 2,152 3
Luxury properties from USD 1,12 mln 4,788,582 57,332 269
All offers 3,421,830 39,038 406

The state of the real estate market in Dubai in 2021

According to wealth analytics company New World Wealth, in 2021 Dubai was in 29th place in the list of top destinations among the rich and super-rich. The total amount of capital concentrated there is AED 1.9 trillion (USD 530 billion, CNY 3.3 trillion). Dubai is the richest city in the Middle East and Africa.

Experts explain its popularity among wealthy people with the fact that they can work remotely and still live in Dubai. They consider tax benefits and lifestyle and strive to call this city their home,” adds Cyril Lincoln. The Crown Prince of Dubai, Sheikh Hamdan bin Mohammed Al Maktoum, noted the results of 2021, stressing that the emirate’s reliable infrastructure, its legislation system that keeps up with the changing market conditions and a safe environment have strengthened investor confidence.

The growth in the number of people wishing to live in the emirate exceeds demand, and this in turn drives up prices. In 2021, the real estate sales industry in Dubai was breaking records. According to the report by the emirate’s Land Department, there was a 66% increase in the number of transactions last year, as well as a 72% increase in their value compared to 2020.

The last year has been a profitable one for the Dubai real estate market, a performance that has not been seen in the last 8 years. The average cost per square meter in 2021 reached AED 9,382 (USD 2,555, CNY 16,245) while the average home price was AED 1.42 million (USD 386,000, CNY 2.4 million). Prices rose by 9.3% compared to the previous year. The cost of luxury properties were also increased: for example, in the Burj Khalifa tower, prices jumped by 23%. Renting a residential property in the emirate in 2021 has become more expensive by 18.9% year on year.

According to experts, it is not worth waiting for a fall in prices after their sharp rise. As Vinayak Mahtani, CEO of a short-term rental company, pointed out that Dubai’s property market has indeed been cyclical in the past, peaking in 2005 and 2014 and collapsing in 2008 and 2018. Nevertheless, Mahtani is convinced that a new decline after the records of 2021 will not happen. In his opinion, the days of serious upheavals are over, and the sphere has finally reached maturity.

First home sales statistics in 2022. How much does property cost in Dubai?

2022 is off to a promising start. Since January 1 this year, 18,0965 transactions have already been concluded in the emirate, which is 78.13.8% more than in the same period last year. The total amount of sales was AED 49 billion (USD 13.34 billion, CNY 84.28 billion), showing an increase of % year on year. The cost per square meter for villas rose by 15.5% to AED ($24, 15,490 Chinese yuan). Apartment prices in Dubai rose by 3% in 2022 to AED 15,440 (USD 4,203, CNY 26,556). Building plot prices have risen more than any other type of property, with an average price of AED 10,609 (USD 2,888, CNY 18,247) per square meter, up 95.1% from a year earlier. The price per square meter of commercial real estate is also showing an upward trend – it increased by 21.3% to AED 9,049 (USD 2,463, CNY 15,564).

The most expensive property sold so far in 2022 was a plot of land in the Palm Jumeirah area worth AED 536 million (USD 145 million, CNY 922 million) with a total area of ​​​​almost 9,000 square meters. The most expensive housing is the apartment sold in the Burj Khalifa – it cost AED 73 million (USD 19.8 million, CNY 126 million). Their area is 1949 square meters.

The Dubai Land Department report notes that the largest number of transactions for the maximum amount was concluded in the Dubai Marina area – 7968 contracts signed for 28.6 billion AED ($ 7.8 billion, 49.6 billion Chinese yuan). Other areas where large sums were spent on real estate were:

  • Palm Jumeirah,
  • Hadaeq Sheikh Mohammed bin Rashid,
  • Burj Khalifa,
  • Business Bay.

Forecasts: property prices changes in Dubai after the crisis

Against the background of the stunning results of 2021, many industry experts predicted that the results of 2022 will be, if not higher, then at least no less impressive. So far, events are developing according to this scenario.

A further rise in the market was also predicted by D.K. Shilpa, CEO of construction company Arqonz. She stated that the emirate’s real estate industry has bounced back and, judging by the trends, will be on a strong growth path for at least the next three years. “This is the best time to invest in real estate in Dubai, given the fact that by 2023-2024 its value will steadily increase,” said Shilpa.

Many analysts agreed that house prices will continue to rise in 2022 and beyond. According to Arqaam Capital bank, transaction volumes will remain at the level of a multi-year high. Reuters reported that strong demand is likely to lead to a sharper rise in housing prices in Dubai this year than previously thought, although supply in the city-state will prevail over demand for several more years. Analytical agency Zawya, citing authoritative sources, said that prices will continue to rise, but more evenly than in 2021.

According to International Finance, based on analysts’ opinion, snoqualmie casino restaurants will rise by 4-6%, and optimistic market conditions will last at least 18 months. According to Arabian Business, average property prices in Dubai will increase by 5-10% during 2022 as the market maintains momentum after a record year.

Reuters, based on the results of a survey of industry experts, anticipated a price increase of 5% in both 2022 and 2023. When asked how the situation with housing affordability will develop in the next 2-3 years, 6 out of 10 analysts answered that it will improve. At the same time, 7 out of 11 respondents thought that the demand for foreign investors would stimulate the housing market in Dubai.

Conclusion

A combination of factors and a steady growth trend make real estate in Dubai an attractive investment in 2022. However, many experts believe that the best time to buy has already arrived. For example, Vinayak Mahtani predicted a massive market growth in the next 10 years, while noting that the cost of housing in Dubai will rise steadily. “In 10 years, after adjusting for inflation, you won’t be able to buy the same one-bedroom apartment for $680,000. By then we will reach the world level, and the same apartment will cost more than $2 million,” he said.

Real estate agency in Dubai Ax Capital will help you make the right choice and buy your ideal property. Our specialists will answer any questions, just contact us by phone or leave a message on the website, where you can find the very latest property prices in Dubai as well as get information about the sales stats in the UAE real estate market.