Comparison of the UAE real estate market with other global top cities

United Arab Emirates is a popular destination for relocation and investment. The demand for properties for sale in Dubai is as high as ever. This is one of the country's largest cities, where property prices are relatively lower than in other popular cities in the world. The real estate market is rapidly growing and attracts investors from all over the world. . In this article, we are talking about why investing in apartments in the UAE is a good idea.

UAE's real estate market: main trends

The maximum growth rate of property prices was reached at the turn of 2011–2012, after that the market experienced a long-term decrease in prices. The main reason was the state of the world economy and the fall in oil prices. In 2020, the global pandemic aggravated the economic situation. Even though the lockdown period in the UAE was shorter than other countries, investors were wary of buying property in the Emirates feeling uncertain about future prospects. The pandemic forced many people to reconsider the usual values, including living conditions and how they affect the quality of life. As a result, in 2021, the real estate market began to stabilize.

While in the past, apartments were the most popular option to buy, the latest trends indicate that detached houses and villas are becoming more sought-after properties. According to Bayut & Dubizzle, the first half of 2021 saw a record increase in villa and townhouse sales. Record sales were observed in both budget and luxury sectors. The cost of housing increased by 5% and is continuing to grow. Analysts say that this trend is likely to continue next year. So far, they expect that the growth rate of the price threshold will have reached 3% by the end of this year and an extra 1.5-2% in the next year.

Comparison of the UAE real estate market with other world’s top cities

Property prices in the UAE, Dubai's prices stats

Foreign nationals associate the country with 2 of the largest cities: Abu Dhabi and Dubai. The latter is especially popular thanks to its well-developed infrastructure and tourism sector.

Therefore, it is more reasonable to analyze prices for apartments in Dubai and other properties in this city. On average, the cost of a square meter of an apartment varies depending on the location. For instance:

City Walk - $ 4,120
Dubai Creek Harbor - $ 3,970
Mohammed Bin Rashid City - $ 3,746
Palm Jumeirah - $ 3,265
Dubai Marina - $ 3,150

When it comes to the average cost of a property, in City Wok the price tag is $ 750,000, in Palm Jumeirah it is $ 677,000, and the minimum property price in Discovery Gardens is $ 73,000.

The prices for villas and townhouses are slightly different. They range from $ 1,585 to $ 4,240 per square meter. The cost of transactions ranges from $ 364,900 to $ 1,873,031, but these are just prices; the maximum price tag can be as high as tens of millions dollars. Luxurious villas in Dubai in the first half of 2021 were sold at a price starting from $ 10,000,000.

Comparison of the UAE and UK property prices

If you buy an apartment with an area of about 120 square meters, then the cost of a meter will be about $ 5,900. In London, this figure reaches $ 26,260. Such extremely high prices are caused by the lack of new development projects. In the central part of the city, there is no free space for new projects, therefore properties for sale and rent are so pricy. The pandemic has made its own adjustments and an increasing number of people prefer to live outside the city and not in the crowded center. Therefore, property prices in the suburbs are growing faster than in the city.

Compared with Dubai, properties in London have a few disadvantages, including:

Low ceilings, most apartments have 2.5-meter-high ceilings. This gives the impression of a limited space. In Dubai, on the contrary, new projects feature spacious apartments with high ceilings and panoramic windows.
Lack of parking. For city residents, car parking is still a problem. In the Emirates, villas have a garage and development projects offer underground parking. Residents do not have to pay extra fees for a parking space.
A complex taxation system that requires additional costs. Rental income excessing $ 15,000 is taxed. The tax rate is progressive, the first stage is 20%.

Experts believe that it is not worth waiting for housing to become cheaper so even the increase in demand and sales is obvious. Even if there is a slight increase in prices in the UAE, buying real estate will be cheaper and more profitable.

Comparison of the UAE real estate market with other world’s top cities

Price analysis in comparison with USA

New York is one of the most expensive cities in the country. A square meter of housing costs an average of $ 17,000.

A house in Dubai can be purchased at the price of $ 272,000. In the USA, the price tag starts from $ 650,000. According to DailyFx, experts expected a 6.5% decline in sales in January 2021 but in practice, sales of new homes fell by more than 18%.

DUBAI REAL ESTATE MARKET

The market analytics of these 2 major cities will be useful for foreign investors. Dubai real estate is more affordable. This is more evident in secondary housing stock as houses commissioned more than 10 years ago are considered technically obsolete and less expensive to sell. The layout also offers more possibilities such as terraces, open pools, and panoramic windows. These options as well as the developed infrastructure of residential complexes significantly increase the comfort of life. There, you can find everything you need from a sauna and swimming pool to a fitness center. Therefore, in Dubai, the quality of housing is more attractive. As far as the price policy is concerned and apart from luxury properties, multi-bedroom apartments can be purchased for similar prices.

Five reasons to invest in real estate in United Arab Emirates

Relative stability of the economy and the local currency exchange rate against the dollar. It has remained unchanged since 1997. It ensures zero chances of financial losses caused by the exchange rate.
You can buy an apartment or a house with a larger area than in Europe or America at the same price.
The absence of some types of taxation common to Europe such as personal income tax or property tax allows you to own any type of housing and not waste money on additional costs. In addition, you can rent out real estate and receive a net profit, tax-free.
Liquidity. High demand allows you to sell property at any time without losing money.
Higher rental rates. While in European cities the rental yields do not exceed 3%, in the Emirates they can reach up to 10%.

Comparison of the UAE real estate market with other world’s top cities

Emirates.Estate help choose an ideal property in UAE

The aggregator's property catalogue includes the very latest offers in the seven emirates Real estate agencies in UAE and developers publish their ads. Various property offers allow you to choose an option for any budget. Start choosing right now and get reliable information about the country's housing market.