Results of the year: key events in the UAE real estate world

Results of the year: key events in the UAE real estate world

Against a background of a tense global geopolitical situation and inflationary expectations in the world, the UAE remained an island of economic and political stability in 2022. The real estate markets of the two main emirates of the country, Abu Dhabi and Dubai, showed steady growth in every direction. Experts consider this a sign of long-term positive trends in the market.

The sale of real estate in Dubai and the rest of the Emirates in 2022, surpassed the success of the post-Covid 2021 results, and also showed thousands of worldwide investors the reliability and prospects of the Emirati real estate market.

We’re going to discuss the landmark events of 2022 in Dubai and the UAE, as well as the current trends observed today in the market.

Content:

Market statistics and successes of 2022

Dubai real estate remains the main engine in the real estate industry of the UAE. According to Bloomberg (referring to data from the Dubai Land Department), prices for local residential properties have increased by 89% over the past year. In the first half of 2022, over 43,000 transactions of more than 114.96 billion AED ($31.3 billion) were registered.

The demand for luxury housing is actively stimulating the market, which has continued its steady recovery after the pandemic and has already surpassed the indicators of 2021. In the first quarter of 2022, the largest number of real estate transactions since 2010 was registered within one quarter – a total of 25,972 transactions worth 55.51 billion AED (more than $15 billion).

The second quarter of this year was also moderately successful. During the specified period, 22,504 purchase and sale transactions were registered amounting to 59.15 billion AED (more than $16 billion). Compared to the same quarter of 2021, the market saw an increase in value of 61.56% with an increase in sales of 45.86%.

In the third quarter of this year, sales reached 70 billion AED (over $19 billion), which is 18% more than in the same period of the second quarter of 2022 and 64.5% more than in the third quarter of 2021.

Latest data

Data for the fourth quarter of 2022 demonstrates the continued growth of the Dubai real estate market. The total volume of transactions amounted to 90,184 units sold since January 2022, which is 48% more than in 2021. The total amount of transactions exceeded 245.6 billion AED (over $66.8 billion), which is 63% more than last year.

Since the beginning of December 2022, objects have already been sold, which is 61.4% more compared to last year's figures for the same period.

Results of the year: key events in the UAE real estate world

Common purchases

Sales of finished real estate in Dubai in comparison with objects under construction

Buyers continue to give preference to ready-made real estate. However, the gap between ready–made and under-construction housing is insignificant, as 55% of the transactions are for ready-made residential units, and the other 45% is for units under construction.

Volume of real estate sales by category (2022) numerous

  • The most "desirable" housing for buyers and investors are apartments in Dubai. They accounted for 65% of the total volume of transactions.
  • Land plots – 21%.
  • Villas – 11%.
  • Commercial real estate – 3%.

Why do people invest in housing in Dubai

Dubai is recognised as one of the best places in the world for tourism, living, and investment. The developed social and economic environments provide foreigners with numerous opportunities that are not available in other countries.

Experts identified four investment advantages that greatly contribute to attracting foreign capital to the emirate.

Competitive rental yield

Dubai offers a higher return on real estate, which by the end of 2022 could reach an average of 9.19% per year. This is higher than in other popular cities in the world, e.g., London (7.89%) and New York (4.48%).

Economic growth and stability

Investors choose Dubai due to the stability and sustainable development of the economy. As the prominent tourist and commercial centre of the Middle East, the emirate has one of the most diversified economies, attracting a large volume of foreign investment annually.

Regulated market

Dubai's real estate market has been recognised as the most transparent in the Middle East and North Africa. At present, the real estate sector is rapidly growing without any signs of slowing down.

Tax-free investments

One of the main advantages of investing in Dubai, especially in real estate, is the tax exemption. Although VAT has been introduced very recently, it’s still insignificant in terms of overhead expenses and does not apply to the purchase of real estate.

Results of the year: key events in the UAE real estate world

Top of the main events in the world of real estate in Dubai and the UAE in 2022

Dubai's real estate market experienced several significant events in 2022. Here are the most important ones:

1. Sale of the most expensive land plot

The largest real estate transaction in Dubai in 2022 was the sale of a 100,000 m2 plot in Dubai Marina. The transaction value was 690 million AED ($187.6 million). This amount broke the previous land sale record of 600 million AED ($163.3 million) to Indian billionaire Mukesh Ambani.

In the future, the land plot for 690 million AED will be used for the construction of ultra-luxury residential complexes with apartments and penthouses.

2. The third quarter of 2022 was the best in the history of Dubai's residential sector

In the third quarter, the demand for luxury housing and villas in Dubai continued to grow rapidly. The result was a record sales volume for this quarter of 70 billion AED (more than $ 19 billion), which also showed an increase of 18% compared to the indicators of the second quarter of the outgoing year and 64.5% compared to the third quarter of 2021.

3. Sale of the most expensive villa worth $ 163 million

The buyer of the most expensive villa in the history of Dubai was Mukesh Ambani, the second richest man in India. The billionaire bought the villa from the former owner, Mohammed Alshaya, a tycoon from Kuwait. The $163 million property is located on the Palm Jumeirah archipelago.

Today, this sale is the largest housing transaction in the history of the emirate.

4. In terms of sales of primary and secondary housing, Dubai surpassed a 12-year high in the third quarter

In the same third quarter, a 12-year high in the volume of sales of secondary and cash housing was recorded. Experts explained that this was due to the approach of the World Cup. Subsequently, this event significantly affected the rental real estate market and increased the demand for rentals by over 40%.

5. GDP growth by more than 6%

According to forecasts of the International Monetary Fund (IMF), the total GDP of the UAE will grow by over 6% by the end of 2022. Let’s recall that in 2021, this indicator reached a figure of 3.8% during the recovery period for tourism after the coronavirus pandemic, the launch of new projects, and the activity associated with the EXPO 2020 exhibition in Dubai.

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