Detailed overview of the UAE real estate market per emirate

Real estate in the United Arab Emirates is in demand. After a decline in sales caused by the global economic crisis and pandemic, the situation is recovering. The 2 largest megacities of the country are most in demand but other emirates of the state see apartments being purchased no less actively than property in Dubai or Abu Dhabi. Affordable prices and a high standard of living make the region’s housing attractive to investors. Let's try to figure out in which areas investments are most profitable.

Table of contents:

• General trends in the UAE real estate market
• Home sales statistics
• Trends to expect in the future
• Real estate in Dubai
• Real estate market in Abu Dhabi
• Apartments in Fujairah
• Houses and apartments in Ajman
• Properties in Ras Al Khaimah
• Home sales in Umm Al Quwain
• Apartments in Sharjah
• Important things to consider when choosing a property
• Main aspects to consider
• We help buy property in the UAE

General trends in the UAE real estate market

After the borders were closed in 2020, the demand for housing has decreased significantly. This was also influenced by people’s psychological fears. In 2021, restrictions eased and investors returned to the market, showing an active interest in detached properties in isolated areas. While earlier the most popular options were small buy-to-let studio apartments used for subsequent rental, now the first place in sales is taken by villas in Dubai. The increase in sales for the first half of the year was almost 200%. According to the analytical agency, Core, the increase in demand at the beginning of the year alone was over 137%.

Properties in the off-plan segment are especially popular. A large part of the area of construction consists of new apartments which are attractive with flexible payment schemes and additional bonuses from developers. These can be different, ranging from a multi-year installment plan for making payments and ending with the payment of a mandatory fee when registering a property after it is built. Most of the off-plan options are apartments. In the first quarter, more than 10,000 properties were commissioned in Dubai, which is the leader in sales. By the end of the year, it is planned to commission at least additional 26,000 homes, almost 80% of which are apartments in new developments in Dubai.

The trend of increasing demand is stimulated by the opening of the Expo-2020. According to Ian Goldin, professor of globalization and development at Oxford University, "Dubai real estate has a great potential for further investment."

Home sales statistics

According to the Dubai Land Department report, the 3rd quarter of 2021 showed a 64.5% increase in transactions and a 138.8% increase in transaction costs. Rents have increased and the return on investment index has begun to grow. The specific amounts depend on the district but on average are 5%. Luxurious real estate has become more popular. Jan Albert, CEO of Colliers, says that, "Capital growth in Dubai is about 30% and profitability is about 5% which exceeds some key markets in Europe."

Edward Makura, partner of the real estate consulting company Core, notes that rents for housing in Dubai will continue to increase in the fourth quarter as well as in 2022. In this case, the process will be segmented. Villas and most high-end residential areas are expected to grow faster.

,p>Prices are directly related to the area of housing and its location. As examples, here are several sub-communities in Dubai and their prices in dollars:

• In Meydan One, one-bedroom apartments can be bought at the minimum price of $ 200,000.
• In Dubai Healthcare, two-bedroom apartments can be purchased for $ 450,000.
• A similar apartment in Al Barsha Site (Al Barsha South) costs a little cheaper. The price of an apartment starts from $ 370,000.

Trends to expect in the future

The positive outlook for the beginning of the year has been met. They predicted off-plan sales growth, higher prices and higher demand. According to the Chestertons Real Estate Agency report, the results achieved in the third quarter of 2021 exceeded the level of 31,670,000,000 dirhams, offsetting the achievement of the fourth quarter of 2013 and one of the most successful sales in the UAE market.

It is always difficult to predict the potential of the housing market because it depends on many factors. The global pandemic has clearly demonstrated that a crisis can happen unexpectedly and not be related to the cost of oil. But most experts believe that real estate prices in the UAE will increase before the end of 2021. This situation will continue in 2022 which will also be affected by the Expo-2020. It is therefore appropriate to consider the Arab real estate for investment or to move to now. Atik Munshi, Managing Partner of FinExpertiza UAE, said that in Dubai and the rest of the emirates of the UAE there has been a steady increase in real estate prices especially for the elite over the past year and a half. "The trend is expected to spread to more accessible properties as well."

Real estate in Dubai

This is one of the cities with traditionally high property sales. The interest in buying villas has almost doubled in this emirate. The market is recovering according to the Dubai Land Department, and by the end of the first half of the year, there were 27,373 transactions worth AED 61,970,000,000; the revival of purchasing power is evident. The most active investors are nationals of India, followed by expats from the UK and Pakistan. The most active investors are nationals of India, followed by expats from the UK and Pakistan.

Why property hunters choose this city in the UAE:

• The cost of housing is still almost 36% lower than in the peak period of 2013.
• It is more profitable to buy local property than similar options in major European cities.
• Convenient payment scheme. Mortgages have become even more affordable. The down payment has been reduced from 25% to 20%, the interest rate for some properties is only 2%. This has doubled the mortgage sales.

Real estate market in Abu Dhabi

This is one of the cities with traditionally high property sales. This was largely due to the lack of permission from the authorities for expats to purchase housing. In 2019 Abu Dhabi also introduced freehold zones where you can buy property and be its rightful owner. Investors choose Abu Dhabi for its high return on investment. It reaches 7-8% per annum. Local housing is in demand among both local residents and expats. About 80% of properties is purchased by local residents, so you can be sure that the housing has high liquidity.

The main trends in the region are:

• Increased attention to luxury properties.
• Demand for beachfront apartments. The coastline stretches along 700 km, which opens up great opportunities. It is believed that Abu Dhabi has the most comfortable white sand beaches with crystal clear water.
• Transport accessibility. The capital has two largest airports in the country.

Apartments in Fujairah

The emirate is located in the eastern part of the country. It does not have access to the Persian Gulf, it is washed by the waters of the Indian Ocean and the Arabian Sea. Holidaymakers choose this city thanks to its peace and quiet and a relatively small population. The emirate is home to around 150,000 people. The local coral reefs attract many divers. The average cost of housing in the emirate for a four-bedroom apartment can range from $ 817,000 to $ 998,000.

Houses and apartments in Ajman

This is the smallest emirate with access to the Persian Gulf coast. The resort area combines old quarters and areas with modern development projects. The property owners enjoy the calm atmosphere and close proximity to Sharjah. There are many attractions in this area, and the cost of housing is much higher. Ajman is famous for its pristine nature but it also has a developed infrastructure such as an international airport, many shopping centers, and educational institutions.

The average property prices are as follows:

• One-bedroom apartments can be bought at the price starting from $ 130,000. The cost depends on the living area.
• Two-bedroom apartments are offered at the price starting from $ 160,000.
• A five-bedroom villa can be purchased for $ 460,000.

Properties in Ras Al Khaimah

The emirate is famous for its perfectly clean beaches. The oil industry is not so developed in this emirate, therefore the environment is not affected by it. There are many hotels located on the front line. Holidaymakers can also enjoy many natural attractions, parks and zoos. You can learn the local mentality in the Bedouin camps, which accommodate tourists in tents in the desert.

In comparison with the largest cities in the country, the cost of housing in the emirate is more affordable:

• A studio apartment can be purchased for as little as $ 130,000.
• Two-bedroom apartments cost between $ 115,000 and $ 299,000.
• A one-bedroom villa costs around $ 200,000.
• A four-room villa costs from $ 1,500,000.

The prices are averaged and may vary depending on the living space and its type.

Home sales in Umm Al Quwain

This is another relatively small emirate of the United Arab Emirates. It has excellent climate conditions. In the winter months the temperature does not exceed 26 degrees Celsius, and in the summer the sea breeze helps to withstand the heat. The natural landscape combines mangroves, sand dunes and oases. There are also islands with a unique atmosphere and architecture. The emirate is full of attractions, ranging from a modern water park to an aero club. Sea activities include sailing, fishing, surfing, visiting refined beaches. Real estate is based on different budgets. An elite house with 6 bedrooms and 7 bathrooms can be bought for AED 35,000. 1-bedroom apartments are available for AED 550,000 and more.

Apartments in Sharjah

The emirate is located on the coast of the Persian Gulf. This is an area with developed infrastructure and a wide range of attractions: many museums, architectural monuments, shopping malls. It offers apartments for all tastes, from luxurious penthouses to compact studio apartments. The close proximity to Dubai ensures great opportunities. You can enjoy the vibrant city life in Dubai and escape from the hustle and bustle of the city in Sharjah. The housing market is quite democratic, you can buy:

• A townhouse with four bedrooms for $ 453,000.
• A two-bedroom apartment for $ 253,000 or a one-bedroom apartment for $ 153,000.

The emirate also has construction land plots for sale.

Main aspects to consider

Foreign nationals should be aware that there are two types of ownership rights to property: freehold and leasehold. A freehold property means that you are a rightful owner of the property, while a leasehold property means that you lease the property for a certain period of time (the lease term is usually 99 years). Even within the same district, there can be developments where foreigners are not allowed to buy property. However, the list of emirates and areas where foreign property hunters can buy housing is regularly expanding. You should clarify the form of ownership before you choose a property to buy. If there are no freehold properties in the desired region, you can always find the best options in the neighboring communities.

Important things to consider when choosing a property

Foreign nationals should be aware that there are two types of ownership rights to property: freehold and leasehold. A freehold property means that you are a rightful owner of the property, while a leasehold property means that you lease the property for a certain period of time (the lease term is usually 99 years). Even within the same district, there can be developments where foreigners are not allowed to buy property. However, the list of emirates and areas where foreign property hunters can buy housing is regularly expanding. You should clarify the form of ownership before you choose a property to buy. If there are no freehold properties in the desired region, you can always find the best options in the neighbouring communities.

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