Dubai’s real estate market ended 2021 at a record high with annual growth at its strongest in eight years. Betterhomes’ 2021 Dubai Real Estate Market Report revealed that 2021 concluded with a 70% increase in units sold and a 107% increase in sales value, amounting to AED 147 billion, year-on-year.
Richard Waind, Group Managing Director, said, “The Dubai residential market enjoyed a strong year in 2021 with transactions at an 8-year high and prices in some prime communities surpassing the previous peak set in 2014.”
The report pins this remarkable growth primarily on Dubai’s resilient economy and historically low mortgage rates amid the pandemic, resulting in a stronger than ever demand from domestic and international homebuyers last year.
“The UAE government’s continued commitment to attracting talent, business, and high-net-worth individuals to the Emirates has seen a raft of universally welcomed reforms to visa, business, and social rules. All of which helped make Dubai and the UAE the destination of choice for holidaymakers and expats in 2021,” Waind added.
The ‘race for space’ continued well into last year since it began in 2020. What was once viewed as a pandemic-induced distortion is now likely a reflection of the new normal. As home offices and outdoor space skyrocketed in popularity and importance, buyers favored spacious townhouses and villas over apartments.
Communities that saw the most number of transactions largely remain unchanged in 2021. For villa and townhouse communities, for example, The Springs, The Villa, and Dubai Hills Estate still held the top spots. For apartments, Dubai Marina and neighbouring Jumeirah Lake Towers and The Palm Jumeirah were still the most popular.
Betterhomes in-house data showed that leasing managed to end 2021 on a positive note with transactions up by 11% and tenant numbers up by 16% YoY.
As with previous years, there was significantly more leasing activity in popular upscale areas in Dubai. Betterhomes saw more leases signed in The Springs, Mirdif, and Al Barsha for villa communities. For apartments, demand remained high in Dubai Marina, Dubai Hills Estate, and Downtown Dubai.
Although upfront payments in single cheques often offer the incentive of a relatively lower annual rent, the majority of tenants opted for multiple cheques. Consistent with 2020, Betterhomes registered more four-cheque transactions at 39% versus a full annual payment at 25%
Year-end observations and insights
More than just the sales value and volume, several notable trends emerged in 2021. Here are key findings from the group’s year-end report:
Dubai was a post-pandemic hotspot and haven for investors
Despite the global disruption, Dubai managed to weather the storm better than any other market and buyers were quick to see this. As it staged a strong recovery this year, more investors turned to Dubai’s property market where life and business were minimally impacted.
The interest and desire for larger homes continued
What was once viewed as a pandemic-induced trend is fast becoming the new normal as buyers showed a continued preference for homes with office and outdoor space. Villa transactions, in particular, showed a whopping 153% increase YoY.
Sustained demand in Dubai’s prime communities helped push prices up
Gaining the most momentum in median price increase last year was Palm Jumeirah at 65% for villas and townhouses. It was followed by Jumeirah Islands at 55%, and Jumeirah Park at 46%. For apartments, Jumeirah Beach Residence took the lead at 49%, followed by Dubai Creek Harbour, and Dubai Science Park, both at 32%.
The luxury sector picked up with total sales values and transactions climbing at a robust pace
Looking at properties sold and fetching at least AED 10 million, DLD data showed a marked increase at 290% year-on-year. At Betterhomes, the increase of properties sold at this price range was logged at 450%.
COVID-19 impacted buyer behavior and demographics
Despite Dubai becoming one of few cities that remained open to tourism and trade, activity from foreign investors was ultimately shaped by international protocols and travel restrictions. The top three buyer nationalities at Betterhomes in 2021 was showed India at 19%, the United Kingdom at 10%, and Italy at 8%.
The shortage of properties available for rent pushed rents up
Residential leasing activity continued with a growth of 11% YoY. Betterhomes accounted for the modest growth to the growing gap between supply and demand. According to the report, more properties are being snatched in the market for end-use, further worsening the supply crunch, especially with villas and townhouses.
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