UAE real estate in numbers: five main indicators that will interest investors

UAE real estate in numbers: five main indicators that will interest investors

The unprecedented growth of the UAE economy and the real estate market in Dubai, in particular, is the result of targeted measures undertaken by the country's government. These measures were extremely effective in helping to overcome the consequences of the pandemic and even surpass the indicators of previous years. The UAE economy demonstrates consistent upward trends, and therefore, an ever-increasing number of foreign investors are willing to invest their capital in commercial and residential real estate in the country.

In this article, we list five figures that eloquently demonstrate the success of the real estate market in the UAE and Dubai, as well as share relevant statistics that will be useful to anyone who plans to purchase a property in the UAE.

Content:

A GDP growth of 6% in 2022

According to the forecasts by the International Monetary Fund experts, the UAE economy will grow by more than 6% and reach $425 billion by the end of 2022. This will occur due to the growth of tourism, construction, and the high activity of foreign investors in the real estate market. For comparison, in 2021, the GDP growth amounted to 3.8%, despite the restrictions associated with the global coronavirus pandemic. This good performance was due, among other things, to activities related to the global exhibition EXPO-2020, which took place in Dubai.

According to official data received from the World Bank, the UAE's GDP in 2020 was $358.87 billion. Today, the share of the UAE GDP is 0.27% of the world GDP. The UAE’s GDP will probably reach approximately $400 billion in 2023 and $425 billion in 2024.

It is worth noting that the United Arab Emirates economic growth series covers the period from the first quarter of 2013 to the first quarter of 2022. During this period, the average economic growth rate in the UAE was 2.26%. The lowest growth rate of minus 9% was recorded in the third quarter of 2020, while the highest growth rate was 8.72% in the fourth quarter of 2021.

The data for the first quarter of 2022 shows an economic growth of 8.44%, which is an 8.72% decrease from the growth rate for the same period a year earlier. To date, the overall dynamics of the development of the UAE remain positive.

UAE real estate in numbers: five main indicators that will interest investors

A 50% increase in Dubai’s prices are predicted for the end of 2022

Prices in Dubai’s real estate market will be 50% higher than in 2021 by the end of this year.

According to the international consulting company, CBRE, in October prices for villas in Palm Jumeirah reached the highest in Dubai, at AED 3704 ($1008) per square meter. The value of such properties has risen in each of the past six months, sometimes by as much as 5% per month.

In 2022, the Palm Jumeirah real estate market set several records. Alpago Casa Del Sole was sold for AED 302,000,000 ($82,200,000), which is the highest price ever received in the Dubai real estate market. After that, a rental value record was set when a villa was rented out for 6 months for AED 4,000,000 ($1,089,000).

An increase of 13.5% predicted for luxury housing in Dubai in 2023

Dubai is currently the most economically significant emirate and is demonstrating an unprecedented upward movement in the luxury real estate market. Against the background of the overall economic development of the country, Dubai's luxury real estate market expects the strongest global growth in 2023.

Prices in the emirate's key communities of Palm Jumeirah, Emirates Hills and Jumeirah Bay, are expected to rise by 13.5% next year. Thus, Dubai's luxury housing market will show the strongest growth among the most popular cities in the world in the following year, overtaking Miami (5%), Paris (4%), and Los Angeles (4%).

Dubai's luxury housing market in 2022 continues the upward trends of the last year and maintains its global growth with record values.

Real estate investors place high value on Dubai’s property due to its high level of security, its wide array of international buyers and investors, and the mega-wealthy buyers looking for luxury homes and apartments in new developments in Dubai. We also can’t overlook the government’s wise measures that were implemented to counter the pandemic, which has since strengthened business confidence.

Today, Dubai is one of the most affordable luxury real estate markets in the world, with property prices lagging by 21.4% compared to their 2014 peaks. In 2022, prices rose across all sectors of the emirate amid a broad economic recovery from the pandemic.

UAE real estate in numbers: five main indicators that will interest investors

HNWI number will increase by 22%

The number of wealthy residents is expected to increase by 22% in the UAE during the next 5 years. For example:

  • In Saudi Arabia this figure will reach 13%;
  • In Kuwait – 51%;
  • In Qatar – 21%.

Over the past 5 years, the highest growth rates in the number of HNWIs (individuals with investment wealth) were demonstrated by North America (53%), the Middle East (34%), and Asia Pacific (31%).

Famous global brands are looking for new locations to expand their portfolio, and wealthy, globally mobile people will continue to drive demand for branded residences. In this regard, the level of supply in the real estate market is predicted to increase as brands identify areas that are popular with wealthy people. The UAE has already established itself among such areas.

Rent growth of 22% in Dubai

Today, buying an apartment in Dubai means becoming the owner of a highly liquid property with great investment potential. This is confirmed by the unprecedented growth in rentals in the emirate, which will reach 22% by the end of 2022. Rental growth is recorded in all real estate categories, except villas where prices decreased by 7% compared to 2021. The number of transactions with mortgage housing also decreased by 5% to 5650 units. However, the mortgage real estate transactions amount increased by 12.4% compared to the third quarter of 2021 and reached AED 31.5 billion ($8.5 billion).

In the third quarter of 2022, the total real estate sales in Dubai reached AED 70 billion ($19 billion), which is the highest-ever figure for the entire market. When compared to the second quarter of 2022, the growth reached 18%, and compared to the data for the same period in 2021 the growth demonstrated reached as much as 64.5%. Since the beginning of 2022, property sales in the emirate have escalated by 60%.

UAE real estate in numbers: five main indicators that will interest investors

In summary

2022 in the United Arab Emirates was a successful continuation of the economic growth of 2021. Much of this was made possible by the Dubai real estate market, which not only continued to beat last year's post-COVID recovery records but also consolidated its gains. Experts are confident that the upward trend here will continue for at least the next few years.

For investors the world over, investing in real estate in the Emirates is still an excellent opportunity to try their hand at one of the most economically successful markets in the world and increase their capital in the medium to long term.

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