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UAE’s real estate market continued to grow in Q2 2021, with some segments even recording double-digit growth in sales prices.
According to the Q2 2021 UAE Real Estate Report by property management experts Asteco, in the reviewed period villa rental and sales rates in Abu Dhabi and Dubai continued to increase; sales prices in certain segments went up by almost a quarter.
The report said that approximately 2,070 apartments and villas had been delivered in Q2 2021 in Abu Dhabi. In particular, a lot of new units were added to Yas Island and several new buildings were constructed in Al Raha Beach.
Over 9,350 residential units are planned for handover before the end of this year, the report notes. However, delivery of some projects is likely to be delayed so some handovers might spill over into 2022.
Apartment rental rates in the capital softened marginally – by 1 percent – compared to Q1 2021, while annual declines were more notable and reached 8 percent on average. Mid and high-end properties were most affected by rates decline with rentals ащк some units falling between 10 and 15 percent.
Villa rental rates in Q2 2021 increased by 1 percent on average, predominantly due to the rise of demand for well-developed villa communities located on Yas Island, Saadiyat Island and Al Raha Beach.
Demand for completed villas for sale continued to grow over the quarter, particularly within the upper-end segment, mirroring the rental market. Villa sales prices increased by 1 percent on average in Q2 2021, mostly driven by Al Raha Gardens and Al Reef, which registered 6 percent and 2 percent sales growth rates, respectively.
In Dubai, 6,650 apartments, 1,500 villas and 750,000 square feet of office space was completed in the second quarter of 2021, despite the restrictions related to the COVID-19 pandemic.
Most Dubai communities saw rental rate growth in Q2 2021, which resulted in a 3 percent increase for apartments and an 8 percent increase for villas. Compared to the same period last year, average apartment rental rates remained in contraction at 3 percent, while villa rental rates grew by a robust 10 percent.
Sales prices in Dubai surged significantly, particularly in the villa segment, increasing by 16 percent quarter-on-quarter and by 23 percent year-on-year. As for apartment sales prices, growth there was less pronounced but still reached 6 percent over Q2 2021 and year-on-year.
However, the growth momentum seen in the first quarter of the year appears to be slowing as pent-up demand resulting from the COVID-19 lockdown/restrictions is absorbed. Nevertheless, Expo 2020 and the continued successful rollout of the vaccines and pandemic containment measures by local and federal governments are expected to maintain the positive sentiment.
Apartment rental rates across the Northern Emirates softened marginally with average declines of 1 percent to 2 percent over Q1 2021 and 6 percent over the year.
According to the Sharjah Real Estate Registration Department, in H1 2021 the emirate recorded 40,364 transactions worth USD 3.3 billion, an increase of over 40 percent compared to the same period last year. Most of those transactions took place in the residential sector (49.6 percent), followed by commercial (37.1 percent), industrial (11.1 percent) and agricultural (2.2 percent).
In Sharjah’s master plan communities, apartment sales prices recorded a marginal increase of 2 percent on average, whilst the more mature GCC freehold areas showed signs of stabilizing.
