The Covid pandemic has had far-reaching consequences and has forever changed the global economy and the international housing market. There were changes in property prices in the United Arab Emirates. The world has recovered from the crisis. And the impact of the coronavirus on the ordinary life of every person has weakened. Nevertheless, investors are concerned about what to expect next and how apartment prices in the UAE will change in 2022.
- Trends of the property market in UAE
- How UAE property market will develop in 2022-2023
- Villa prices in Dubai
- Average villa prices in popular areas in Dubai
- Average land plot prices in UAE
- Average commercial property prices in UAE
- Ax Capital will help you purchase a property in Dubai
Trends of the property market in UAE
The demand for villas and townhouses will continue to grow in the UAE. This trend is associated with the self-isolation of people and them wanting to maintain their health as well as the expansion of residential areas. According to the September report from ValuStart, villa sales grew by 20%. In September, there were 22 property transactions registered with the total value of AED 30,000,000.
As for new apartments, demand for this type of property is also significant, but to a lesser extent.
Haider Ali Khan, Bayut & Dubizzle said that since the beginning of 2021 there is an increase in the number of signals showing that Dubai’s real estate market, specifically the home sales sector, is stabilizing. Most of real estate agencies specializing in sales of residential properties confirm this trend with increasing income growth rate for the first six month of the year. This situation is connected with the pandemic when property buyers were not able to redesign their new homes or buy furniture. During the pandemic year people tended to live for the moment, therefore the idea to buy a move-in ready apartment has become so popular.
How UAE property market will develop in 2022-2023
According to Bloomberg, the real estate market in the UAE will continue growing in the next two years. Reuters stated that the growth rate of property prices will reach 3% by the end of the year. The growth rate for the next year is expected to be 2.5%.
The situation in the real estate market started to change during the pandemic already. From 2014 to 2020, the drop in property prices was almost a third of the maximum limit. This situation combined with the Covid pandemic only further accelerated the decline in prices. In 2021 the property prices in Dubai increased on average by 6% to 20% according to Bayut & Dubizzle.
JLL researchers also note positive aspects:
- Demand for real estate is growing in the UAE as people purchase properties with business plans for further growth.
- Housing prices are about 1/5 higher when compared with the price of the 2010 loan crisis.
- The supply of new properties remains at a high level, which is at more than 35,000 units.
According to the research agency, in 2022-2023, more than 53,000 new houses will be built in the emirate. A lot of properties are under construction and will be put into operation in the near future. Despite the difficult conditions as a result of the coronavirus, new properties are developing in the emirate, and this trend will continue in 2022-2023.
Villa prices in Dubai
Villas have become a popular type of property in 2021. Villas in Dubai ensure top quality of construction and materials, sophisticated design and maximum comfort. All villas offer everything you could ask for, from spacious area (from 100 sq m to 2,500 sq m), a gated garden with a pool to parking space and green area
The interior design of villas is of the highest quality. Some homes in villa communities offer a standard design while other units feature a custom-tailored one. Some properties are designed by famous interior designers.
The home prices vary depending on their location. The average villa and townhouses in popular areas in Dubai are given below.
Average villa prices in popular areas in Dubai
|Location||AVERAGE PRICE (AED per sq m)||Sales for the last month|
|Arabian Ranches||1 075||2.82%|
|Dubai Hills Estate||1 239||2.33%|
|Dubai Investments Park||645||4.74%|
|Dubai Silicon Oasis||751||4.69%|
|Dubai Sports City||907||1.49%|
|Jumeirah Golf Estates||1 074||2.11%|
According to Property Monitor, the demand for housing in popular neighbourhoods in Dubai varies.
Average price of a square metre is reflection of the market value for the last three months. Price rates in the given above neighbourhoods will vary in different periods depending on the shifts in basic data and transactions. The average prices may increase within a month because of sale of upmarket units.
In addition, the increase in villa prices during the post-covid times can mainly be attributed due to fears and the need to isolate oneself from society to maintain one’s health. Another important reason is that cottages provide residents with more space and freedom of movement, which is what residents from apartments found lacking during the Covid-19 isolation period.
Average land plot prices in the UAE
|PRICE RANGE||AVERAGE LAND PLOT PRICE||AVERAGE PRICE SQ. M.||AMOUNT OF HOUSING FOR SALE|
|Expensive plots (from 500,000 euros)||17 629 596||4 200||51|
|Average for all segments||15 028 676||3 635||60|
Based on the data in the table, the prices for expensive land plots and the average price for all housing units of the category are slightly different. Currently, there are only land plots available on the market at a price that’s above the average rate. Also, there’s no housing unit available on the market in this category for a cost of up to 150 thousand euros.
Average commercial real estate price in the UAE
|PRICE RANGE||AVERAGE PRICE||AVERAGE PLOT PRICE||AMOUNT OF HOUSING FOR SALE|
|Low-budget option (up to 300,000 euros)||218 609||5 629||5|
|Luxury (over 1 million euros)||55 018 854||5 819||25|
|Average for all segments||40 553 328||5 792||34|
Most of the properties on the market belong to the higher price range. So in the post-pandemic period, more investors have moved their business(es) from countries with unstable economies to countries with (more) stable economies. The United Arab Emirates has become such a country.
Dubai tenants choose big-sized properties
Although many people lost their businesses, jobs, and money in 2020, the demand for more expensive housing and more spacious apartments has increased in Dubai. This trend can be explained by the need for people to have more personal space in connection, especially as they were frequently in isolation during the first year of the coronavirus. The rental housing sector was no exception with regards to this situation as well. Rent rates for luxury property are as follows:
- Emirates Hills – from €186 per sq m
- Palm Jumeirah – from €176 per sq m
- Lakes – from €172 per sq m
Many people who previously lived in rented housing and didn’t have to worry about anything regarding this, now had to start thinking about the defensive measures. One alternative is rent for resale to a mortgage and an opportunity to purchase a house. So you see, having an apartment provides one with a certain amount of protection in the future, which is something that the coronavirus took away from people.
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