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The Q1 2022 UAE Real Estate Report, published by property management experts Asteco, reported that real estate market activity in Abu Dhabi and Dubai remained strong in the first three months of the year as a result of Government initiatives, economic growth and improved market sentiment.
In Dubai, new apartment supply picked up significantly in the first quarter of 2022 with the handover of 6,250 units, compared to less than 4,000 in the previous quarter. However, the villa market lagged behind considerably with only 250 units completed and handed over.
The Asteco report also indicated that new supply for 2022 in Dubai is likely to fall short of earlier estimates. Delivery is now expected to reach a total of 29,000 apartments and 3,250 villas by year-end, with several projects likely to be delayed and to spill over into 2023.
Expo 2020 Dubai was widely regarded as a resounding success. The international event overcame unprecedented challenges caused by the COVID-19 pandemic to deliver a showcase event that demonstrated the best of Dubai. At a time when many countries were closing their borders, the six-month exhibition provided a timely and unequivocal demonstration that Dubai and the UAE are still open for business and tourism.
Even before the first visitors arrived at Expo 2020, the benefits were being felt, particularly in the real estate sector. The awarding of Expo in November 2013 provided a much-needed boost to the real estate market. Dubai’s success in securing the event has frequently been cited as one, if not the primary, catalyst in Dubai’s real estate rally, recorded from Q1 2014.
While the financial benefits of Expo2020 are still being quantified, the qualitative benefits are clear. What is known; Expo 2020 attracted 24mn visitors, providing a significant boost to the tourism sector and FDI.
Sharjah office rental rates, for the first time in nearly 5 years, recorded positive quarterly and annual growth of 3% on average. Nonetheless, landlords will continue to offer incentives in the form of rent discounts and flexible payment terms.
According to Asteco, Sales transaction activity in Sharjah, as well as Ajman, remained strong, particularly pertaining to the villa market. Sharjah apartment sales prices remained more or less unchanged over the last quarter and annual increases averaged 8%.
The real estate market in Al Ain remained relatively stable over the last six months with modest improvements in demand and activity across all sectors.
Although average residential rental rates were broadly unchanged over Q1 2022, landlords continued to offer discounts and incentives including flexible payment terms. Annual changes were still adverse with apartment and villa rental rates softening by 1% and 2%, respectively.
