The United Arab Emirates remains one of the most popular countries for foreign citizens who are either investing in real estate or moving here to the country for permanent residency. What’s more, the Arab real estate market isn’t all that concerned about any type of financial crisis. Especially since its developed economy has long been independent of the oil exchange rate fluctuations. Evidence of this can be seen in the tourism industry and how profitable the scientific and technical development sectors are in the country. Comfortable living conditions attract many expats from all over the world are attracted by it. Moreover, according to the high sales rate in 2021, villas in Dubai are the most popular options. In the first quarter, the sales reached 137% in comparison with the same period last year. There were 1,400 villas sold with the total value of USD 843 mln. According to Zoom Property Insights, the total value of home villa sales reached USD 1.4 bln. The growing tendency was observed during the third quarter as well.
Contents:
- Price projections of villas and townhouses in Dubai after the crisis
- Projections for 2022
- Will the freezing of rental rates affect villa prices in Dubai
- Villas in Dubai?
- Prices for Dubai townhouses
- How much does a villa in Dubai cost
- In which area can you buy a villa
- Return on investment for real estate in Dubai
- Ax Capital experts/consultants will help you to choose the most ideal real estate in Dubai
Price projections of villas and townhouses in Dubai after the crisis
The year 2021 has shown that the real estate market in the UAE is actively growing. For instance, positive changes in housing prices have become noticeable in the first quarter of this year. So, if in the past the top-selling properties and most popular investments on the market were considered studio apartments and apartments, today plenty of buyers are paying attention to villas and detached houses. Analysts say that this is a direct result of the pandemic, which has forced us to reconsider existing stereotypes about the quality of life. So the advantages of owning a detached house are:
- Reducing contacts with strangers
- Having several rooms available for recreational activities, as well as, for work.
- Outdoor space for recreation.
Additionally, over this past year, the demand for housing has helped increase prices by more than 9%. This number is the average figure achieved by the subcommunities of the city. What’s more, in several other communities, including Jumeirah Park and The Springs, these figures exceeded 20%. Furthermore, the International Monetary Fund predicted that the country's economy will decrease by almost 3.5%. Still, this didn’t prevent the country’s real estate investment attractiveness from increasing. The main reason for this is that the government already managed to successfully overcome the crisis of 2008-2011 by stabilizing the budget, and not only due to the introduction of oil. As a result of this, the country has created attractive conditions for expats, which today contributes to the influx of capital from all over the world.
Projections for 2022
Analysts identify two points in the forecasts that can have a significant impact on real estate in Dubai in 2022:
- EXPO 2020 that will last six months and should attract tourists and investors to the country. It is expected that the event will stimulate the economy for the next two years. Ian Goldin, Oxford University Professor of Globalisation and Development says that property in Dubai has a great investment potential. In addition, many experts have high expectations for the rental sector as a result of the upcoming rate freeze.
- The pandemic situation. David Owen, an economist at IHS Markit, notes that the initial increase in sales boosted the market which proves that the economy is recovering from the pandemic. Even though the UAE authorities are successfully coping with the spread of the pandemic in the country, no specialist can guarantee how events will develop in the future. Therefore, if the situation worsens, this may lead to a decrease in demand for real estate. However, prices for villas in the UAE in 2022 will most likely continue to grow.
Will the freezing of rental rates affect villa prices in Dubai?
This rent freezing measure was announced by the Dubai Land Department and it has not been approved by the government yet. Its objective is to block an unreasonable increase in rent. It’s not clear whether this restriction will affect all properties or only specific areas of the real estate market. Still, landlords have already begun to review long-term contracts with tenants and are trying not to lose possible benefits. Also, since the price of renting houses per year is high, this increase may lead to an increase in sales. What’s more, the prices for villas, in particular, are now more favorable in Dubai than compared to that of other major cities in Europe and the United States.
Villas in Dubai
Houses built in closed communities are the main feature of regional development. The pricing of houses in Dubai in dollars provides not only comfortable real estate but also landscaped areas. The more benefits the residents of the community can get, the higher the price is. Usually, well-maintained properties include:
- Several areas for walking and recreation with landscape gardening.
- Swimming pools, fitness centers, and sports grounds.
- Children's playgrounds.
- Shops and restaurants.
This sort of approach allows one to retain privacy without losing that sense of comfort. Homebuyers, in particular, pay special attention to real estate location. There are also villa communities near the main regional highways connecting all the communities. Thanks to this, one can have quick and easy access to any place in the city.
The most popular real estate options are those with three or four bedrooms, with an area that can range from 150 to 400 square meters. The area of high-end houses can reach 1,500-2,000 square meters. In addition to this, there are several other choices of rooms available not only for the occupants of the house and their guests but also for the servants. It should also be noted that the emphasis is not only on the architectural type and design but also on the practical layout. Since reasonable use of the available space allows one to make any accommodation comfortable.
Prices for Dubai townhouses
Townhouses have high payback and are well-known as high liquidity assets. One of its distinctive features is dividing houses among several owners or combining them into one row when each house has a small land plot and a parking space. Usually, the number of bedrooms can range from two to four. The internal infrastructure of the area depends on the location and may include both running tracks, playgrounds, a swimming pool, and a golf course. The possibilities with regards to this are endless. In Dubai, townhouses are both available near the coast or the city center. What’s more, most of these types of communities are also closed and are under round-the-clock security. The average price of townhouses starts from 320,000 euros, but the maximum price can be several times higher. When looking through ads, prices can range from 3,000,000 to 3,500,000 euros with an area size reaching 1,000 square meters.
According to Property Monitor, property market recovery in Dubai before Expo 2020 was caused by the increased townhouse and villa sales. Dubai’s market is expected to observe further growth of sales in the last quarter of the year and in the beginning of 2022.
How much does a villa in Dubai cost
The pricing policy is calculated either by the total cost of the accommodation or by one square meter of area. The latter indicator is most often used to analyze the market and compare the situation in different subcommunities of the city. In 2021, the average price per square meter will be about $2,720, but there are also higher indicators. The highest price increase was found to be in the subcommunities of Dubai Arabian Ranches, where the growth was 10.3%. Whereas, in the Jumeirah Islands the growth rate was 9.1%. Despite all of this, it’s still possible to find favorable offers and purchase a house in Dubai. Especially since the 2022 prices will be more reliable after this period.
It's difficult to give an estimate of such figures as each housing unit’s price depends on:
- The number of rooms.
- Total area.
- Location.
- Comfort level.
Therefore, prices can range from 250,000 to 300,000 euros. Although, in elite areas, it can reach up to 25,000,000 euros. Today, it’s not very advisable to convert the cost of villas in Dubai into dollars because the exchange rate often changes regularly.
In which area can you buy a villa
There are prestigious properties in various communities. If you are looking for luxury housing in a popular area, you should pay attention to houses in:
- Arabian Ranches;
- Mohammed Bin Rashid City;
- Jumeirah Golf Estates.
These communities are associated with traditional luxury. Villas on the coast are popular with home buyers. You can find elite housing units on the Palm Jumeirah.
Return on investment for real estate in Dubai
The housing market in the UAE is stable and affordable. So although the price of villas in Dubai is much higher than apartments with several rooms, investing in them is still profitable. The state has also introduced freehold zones that allow foreign citizens to own property and use it at will in almost all popular areas of the city. The list is gradually on the increase. Additionally, analysts have launched long-term programs to further stabilize the economy and to make life easier for expats in the country. For instance, there’s a pension visa that’s been introduced, as well as, a visa for students and individuals who make a significant contribution to the development of the UAE. As a result, this makes real estate in the country popular both for living and investment. Here are several reasons for this:
- A favorable tax system.
- No property obligations to the state.
- Legal transparency of transactions controlled by the state without financial risks.
- The attractive price of townhouses in Dubai.
- High return on investment with 4-5% per annum.
The investor has additional advantages such as being able to get a resident visa for himself and any family member with an extension for a similar period.
Ax Capital experts/consultants will help you to choose the most ideal real estate in Dubai
Our website contains the most up-to-date information about housing sales in the UAE. In the online catalog, you’ll find both villas and townhouses for sale in Dubai and they’re, all situated in popular communities of the emirate. Plus, from here you’ll also be able to study the main trends of the Arab housing market, along with a list of apartments and up-to-date property prices in Dubai. Don’t delay and contact us today! Especially since housing prices may increase in 2022 and this is a once-in-a-life time opportunity to make a long-term real estate investment at the best price.
