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The year 2022 continued the positive trend of 2021’s success and paved a new path for the real estate market in the UAE. This post highlights the records of two of the most outstanding emirates – Abu Dhabi and Dubai – that demonstrated tremendous growth across the key areas of the real estate market in H1 2022.
Content:
- Growth Drivers in Abu Dhabi
- Records Set in Early 2022
- Price Growth
- Most Popular Abu Dhabi Districts to Buy Property in
- Prices in Popular Districts
- Dubai Success in Q1 2022
- Key Market Indicators in Q1 2022
- Performance of the Emirate’s Most Successful Districts
Growth Drivers in Abu Dhabi
Since the beginning of 2022, the real estate market in Abu Dhabi has been experiencing a boom caused by the inflow of foreign buyers and investors. The leading real estate firms report a demand growth of more than 50% over the first 4 months of 2022 compared to the same period of 2021.
What are the reasons for this?
It is primarily due to the free zone policy arousing the interest of foreign clients. The growing number of free economic zones where foreign entrepreneurs and investors can own businesses and enjoy the benefits of 100% ownership with minimum operating costs are also attractive due to full exemption from personal, corporate, and import taxes.
The second reason is a visa policy reform, including the introduction of a Green Visa for investment in real estate property worth more than AED 2 million (USD 544,511, or JPY 3,566,549), a step-change in the Emirate’s infrastructure, living, and business conditions, which also tempts investors to be more active in Abu Dhabi.
Who is investing?
Buyers from European countries, Russia, Australia, and the United Kingdom.
What are they buying?
The demand for elite homes – sea view villas, houses, and apartments within a walking distance from amenities – is growing. Investors are also interested in high returns on investment from rentals.
Changes in ownership laws and visa policies for foreigners will drive active growth in the Abu Dhabi market in the near future.
Records Set in Early 2022
The Abu Dhabi Department of Municipalities and Transport (DMT) reported that the UAE property market was rebounding after a drop. 3,304 real estate transactions were recorded in Abu Dhabi in Q1 2022. The cumulative value of these transactions reached AED 11.3 billion (USD 3 billion).
Over the first three months of the year, 1,722 real estate purchase transactions with a cumulative value of AED 4.35 billion were made in this emirate. 1,582 mortgages were issued for the amount of AED 6.9 billion.
Price Growth
Over 12 months, by March 2022, the value of residential property grew by 1.5%. The average cost of apartments increased by 1.6%, up to AED 10,904 (USD 2,968, or JPY 19,444)/m², over the same period.
The average price for villas rose by 1.1%, reaching AED 8,850 (USD 2,409, or JPY 15,781)/m².
Most Popular Abu Dhabi Districts to Buy Property in
According to the available data, investors and buyers looking for inexpensive apartments and villas mostly prefer suburbs for family living, like Al Ghadeer and Al Reef. As an alternative, prosperous buyers seeking elite property in the capital of the UAE grew more interested in seafront districts, such as Al Reem, Yas, and Saadiyat islands.
Similarly, Abu Dhabi’s off-plan projects in Masdar City and on Yas, Al Reem, and Saadiyat islands are attracting investors looking for a profitable property on the rise in this emirate.
Prices in Popular Districts
According to the consolidated data published in Bayut & Dubizzle, Al Ghadeer became the most popular place for buying apartments in Abu Dhabi in Q1 2022. The district’s continued popularity among investors can be explained by its inexpensive units, contemporary living amenities, and easy access to Dubai.
The price per square meter in apartments for sale in Al Ghadeer grew by a minimum of 0.69%, reaching an average of AED 716 (USD 194, or JPY 1,276). The average cost of Al Ghadeer studios is AED 346,000 (USD 94,200, or JPY 617,013), while one and two-bedroom apartments cost on average AED 498,000 (USD 135,583, or JPY 888,070) and AED 702,000 (USD 191,123, or JPY 1,251,858) respectively in Q1 2022.
Al Reef is the family living community that came in second with the average price per square meter of AED 754 (USD 205, or JPY 1,344) after it surged by 10.8% compared to Q4 2021. This rise can be explained by the fact that landlords listed their downtown units at higher prices in response to the growing demand.
The average cost of studios in Al Reef is AED 450,000 (USD 122,515, or JPY 802,473), while one and two-bedroom apartments cost an average of AED 621,000 (USD 169,070, or JPY 1,107,413) and AED 771,000 (USD 209,909, or JPY 1,374,904) respectively.
Masdar City is yet another district attracting significant attention from buyers who are interested in inexpensive homes in Abu Dhabi.
The average price per square meter of Masdar City apartments was AED 1,236 (USD 336, or JPY 2,204) – 2.47% lower than in Q4 2021. Local studios are available for an average of AED 529,000 (USD 144,023, or JPY 943,352). One and two-bedroom apartments cost AED 761,000 (USD 207,186, or JPY 1,357,072) and AED 1.1 million (USD 299,481, or JPY 1,961,602) respectively.
Dubai Success in Q1 2022
According to the report published by the Property Monitor analytics platform, property in Dubai did very well in Q1 2022. The value of purchase and sale transactions in this emirate reached a record-setting high of 17,896 units sold!
With the growing number and value of transactions over the past year, 2022 is promising to become a great year for the Dubai real estate sector. Prices here kept growing in Q1, although slightly slower than in 2020. As a result, the value of the property sold in Q1 reached a record-setting amount of USD 11.7 billion, which is 125% more than in the same period of 2021.
The surge in the real estate market was caused by high liquidity, low-interest rates, and significantly higher migration to the UAE. Combined, these factors improved the attitude among housing buyers. Despite the obstacles caused by inflation and the pandemic, the domestic and international demand for all types of residential assets was growing in Q1, since buyers’ appetite and trust remained high, particularly among prosperous investors.
Key Market Indicators in Q1 2022
Housing Sales
According to the Dubai Land Department (DLD), the number of housing units sold surged by 81% in Q1 2022 compared to the same period of 2021, reaching 17,896 units vs. 9,868 units sold last year.
Cumulative Value of Purchase and Sale Transactions (quarter-on-quarter)
In Q1 2022, the cumulative value of real estate transactions reached AED 45.8 billion compared to AED 19.030 billion over the same period of 2021.
Performance of the Emirate’s Most Successful Districts
If we compare the performance of individual districts, Dubai apartment sales were growing most impressively in the following districts:
- Palm Jumeirah (39.6%);
- Downtown Dubai (29.4%).
Villa sales were the highest in:
- Palm Jumeirah (36.7%);
- Jumeirah Islands (31.3%);
- Emirates Hills (9.3%).
The number of new facilities, including new housing projects in Dubai, reached 7,812 units. 56,871 more facilities are scheduled for commissioning in the remaining three quarters of 2022.
