Dubai’s real estate market witnessed a strong momentum with sales transaction volumes in the first quarter hitting an all-time high at 17,896, according to Betterhomes’ recently released Q1 Market Report.
Consistent with the increased transactions and values last year, 2022 is shaping up to be a great one for Dubai’s property sector. In its first quarter, prices continued to increase, albeit at a slightly slower rate than 2020, pushing the value of property sold in Q1 to a record $11.7 billion, a 125% increase compared to the same period in 2021.
The upswing in the property market was driven by high liquidity, low-interest rates, and a substantial increase in migration to the UAE. The combination of these factors worked to lift homebuyer sentiment in the sector. Despite headwinds posed by inflation, Covid variants, Q1 was characterized by increasing domestic and international demand for all types of residential assets as appetite and buyer confidence remained strong, especially among high-net-worth investors.
Richard Waind, Group Managing Director, said, “While the original recovery of demand seen at the start of this price cycle was driven by existing residents taking advantage of the value in the market, recent demand has largely been driven by the influx of new residents to Dubai. Population fell by 8% at the peak of the pandemic but has rebounded by over 18% to stand at 3.5 million at the start of 2022.”
These new residents, many expats attracted by the pandemic response in Dubai, have especially placed pressure on mid and upper leasing markets where we have seen substantial price increases. Occupancy levels across freehold Dubai now stand well above pre-pandemic levels, although old parts of Dubai continue to lag behind and landlords in older, leasehold areas are increasingly needing to look to upgrade their properties, or offer discounts, to attract new tenants.”
Other notable observations include rising demand coupled with supply constraints in the secondary and rental markets, pushing prices higher, and a surge in off-plan transactions, accounting for almost half of the total sales for the quarter. Meanwhile, Betterhomes data revealed a continued appetite for high-end properties and a renewed interest in apartment-type units in sales.
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