The realty sector in Dubai is back in the limelight, beating the COVID-19-induced uncertainties, and it is showing strong signs of sustained growth if one is to go by the statistics released by the Dubai Land Department (DLD). A survey involving property analysts forecasted Dubai house prices to rise by 3.0% in 2021 and 2.5% in 2022 compared to 1.1% and 2.8% three months ago.
The survey predicts the Dubai residential property market to be on a steady course for a couple of years with a modest rise in prices. This indicates affordability on the one hand and sustainable growth on the other. Dubai now has a favorable climate for investment in properties, which gets further endorsed by leading real estate players who are planning new projects. Danube Group, for instance, is one among them.
UAE Residential Real Estate Market Trends
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The Off-plan Housing Segment Performing Well in Dubai
Sales of off-plan property in Dubai registered strong growth in 2021. In August 2021, off-plan properties recorded AED 4.95 billion, or USD 1.3 billion, across 2,599 sales deals. This is the highest sales value to be recorded for sales of off-plan property in Dubai since December 2013, representing an eight-year high. It also represents the highest monthly off-plan transactions by number since November 2019.
Arabian Ranches 3 and Villanova recorded the most off-plan villa and townhouse sales, the report said. A total of 187 units were sold in Arabian Ranches 3 and 157 in Villanova. Other areas of interest included Tilal al Ghaf with 79 units, Dubai South with 58 units, and Mohammed bin Rashid City with 16 units.
Meanwhile, in terms of demand for off-plan property in Dubai during August, top areas for villas and townhouses included Dubai Hills Estate, Arabian Ranches, Palm Jumeriah, Damac Hills 2 and Mohammed bin Rashid City. Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay, and Jumeirah Village Circle were the most in demand for off-plan apartments.
Further, the average transaction price for off-plan property in Dubai saw a year-on-year increase of 53%, climbing from about AED 1.2 million in August 2020 to AED 1.9 million in August 2021. Median prices for off-plan apartment sales stood at AED 1.1 million in August 2021, a growth of 48% from AED 745,500 in the same period last year. Median prices for off-plan villas and townhouses stood at about AED 1.8 million for the month this year, gaining 12% compared to 1.6 million last year.
UAE Residential Real Estate Market Analysis
Competitive Landscape
The UAE residential real estate market has become increasingly competitive. Increasing spending on infrastructure, relaxed laws for foreign investors, new government initiatives to drive investments, and new project announcements are expected to bring an overall development in the real estate sector, which will further enhance the interest of more investors. Some of the major players in the UAE include Aldar Properties, Emaar Properties, Nakheel Properties, Deyaar Properties, and Damac Properties.
Major Players
Aldar Properties
Emaar
Nakheel PJSC
Deyaar Properties
Damac Properties
Aldar Properties, Emaar, Nakheel PJSC, Deyaar Properties, Damac Properties
Recent Developments
In January 2022, the UAE-based conglomerate Alpha Dhabi Holding (ADH) acquired an additional 17% stake in Abu Dhabi’s largest property developer Aldar Properties, taking its stake to 29.8%. In this latest investment, Alpha Dhabi Holding completed the acquisition of Sublime 2, Sogno 2, and Sogno 3, which together own 17% of Aldar Properties.
In November 2021, in the new maritime epicenter of Dubai city’s harbor, Emaar Beachfront is developing a new luxurious residential development spanning 10 million square feet. A private, gated island with superlative offerings is being created on this site in the style of a resort. Various amenities of a premium resort can be expected. A 1.5 km promenade features restaurants, bars and cafes, as well as recreational facilities like shopping and playgrounds. In addition, the beautiful Dubai Marina is right on the doorstep.