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

Comparison of UAE real estate market with other world’s 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 UAE is a good idea.

Table of contents:

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 UAE was shorter than in 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 our living conditions and how they affect the quality of life. As a result, in 2021 the real estate market began to stabilize.

While before the pandemic apartments were the most popular option to buy, the latest trends indicate that detached houses and villas are becoming more sought-after properties. 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 1-1.7% 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 extra 1.5-2% in the next year.

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

Property prices in UAE, Dubai's prices stats

Abu Dhabi and Dubai are the two largest and most visited cities in the country. The latter is especially popular thanks to its well-developed infrastructure and tourism sector. Therefore, it is more reasonable to analyse 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 average price tag is $ 750,000, in Palm Jumeirah it is $ 677,000, 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 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 the price starting from $ 10,000,000.

Comparison of 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 pricey. The pandemic has made its own adjustments and an increasing number of people prefer to live outside the city, and not in the crowded centre. Therefore, property prices in the suburbs are growing faster than in the city.

Comparing 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 say that it is not worth waiting for a decrease in property prices in UAE. Even if there is a slight increase in prices in UAE, they will be cheaper and more profitable than in UK.

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 USA, the price tag starts from $ 650,000. Although housing sales in United States have been falling since the beginning of the year, which is caused by the record high prices, it is thought that prices are highly unlikely to decrease. The pandemic has created a demand for spacious homes, but real estate developers cannot provide affordable property prices because of the high cost of construction materials. It is obvious that property offers in UAE look more attractive than in USA.

Five reasons to invest in real estate in United Arab Emirates

  • The stability of the economy and the exchange rate of the local currency against the dollar. It has remained unchanged since 1997. This ensures zero chances of financial losses caused by the exchange rate.
  • Low prices. You can buy an apartment or a house with a larger area than in Europe or America at the same price.
  • No taxes allow you to own any type of housing and not to waste money on additional costs. If you rent out your property, you do not have to pay rental income taxes.
  • 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

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