Dubai’s Real Estate Market: Prospects and Potentials
As we approach the middle of the year, it's important to reflect on the stellar performance of the UAE real estate market, which broke records and surpassed analysts' expectations.
Data on Dubai Land Department’s website shows there were 6,651 real estate sales transactions worth AED 18.3 billion dirhams in May 2022 according to Allsopp & Allsopp. The firm notes those figures are the highest on record for May in the last 13 years in terms of both sales volume and value.
The figures represent a 51.5% increase year-on-year for sales volume and a 65.4% increase for sales value when compared to May 2021, the firm pointed out. Since the beginning of the year, we have seen consecutive record-breaking transactions every month.
The first quarter of 2022 recorded a total of 25,972 transactions, the highest in terms of number of deals in more than a decade. In terms of volume, the total is also the highest since 2014.
In March alone, Dubai’s real estate market saw 8,399 sales transactions worth AED 22.58 billion, also the highest recorded in the past seven years, according to the Dubai Land Department. This is an 83 per cent increase in total sales transactions compared to the same period last year and a 109 per cent increase in sales value. These numbers attest to Dubai’s strong appeal among investors and end-users.
It is a trend that experts believe will continue through to the end of this year as the market welcomes new launches from ongoing projects and as more projects in the pipeline are introduced. This is hardly speculation, as data from DLD also showed that the off-plan market witnessed 8,616 transactions worth a total of over $4 billion (AED15 billion) while the secondary market did remarkably well with 11,923 transactions worth over $10 billion (AED37 billion) during the same quarter.
These numbers reflect a high degree of confidence from investors in property projects in Dubai, whether they are newly launched or about to be completed. It is a testament to the credibility and maturity of the market and bodes well for the future of the sector.
Our experience at DAMAC certainly confirms these trends. We have several ongoing projects that have been well received in the market. DAMAC Lagoons, for instance, was launched in September 2021. Most clusters have been launched and our Malta and Venice clusters were recently released with great fanfare and customer interest.
This charming luxurious community has attracted many investors with its Mediterranean-inspired community offering vacation vibes and other enchanting experiences. The aesthetically designed villas and townhouses will be built around a stunning one million square feet of lagoons.
Additionally, our Cavalli Tower overlooking Palm Jumeirah, which we launched in September 2021, brought new excitement to the market and easily became a favourite among investors and prospective homeowners.
Since then, we have announced new projects globally as well — namely in Toronto and Miami and have also entered the exciting world of the metaverse.
While innovative and appealing property developments are certainly key drivers of Dubai’s continuing success in the real estate market, several initiatives are providing adequate support to maintain its robust performance. Among these include visa reforms that ease some of the requirements for off-plan investors to get a residence visa. This will help sustain the positive momentum currently being experienced throughout the remainder of the year.
In addition, S&P Global, in its latest report titled Dubai Property Market 2022, says that Dubai’s new working week has also increased its attractiveness to international businesses, which could help boost the real estate market further this year, and possibly beyond.
With Dubai’s forward-looking leadership and reputation for innovation, it is likely that we will see further reforms that can only be beneficial to the real estate sector in the foreseeable future.