UAE real estate 2022: A year in review
Historically, real estate has been the golden sector of the UAE, exhibiting growth year after. The rate of growth may fall a bit now and then, but it has always been on an upward curve. However, 2022 was particularly a stand-out year for UAE’s real estate. Defying global market trends, the property market posted an exceptional performance.
The Emirate of Dubai, in particular, witnessed impressive growth, with property prices going up by 9.5% yoy and more than 90,000 transactions being recorded. Abu Dhabi, too, saw property prices on the upswing, particularly in the residential sector. What signal does this send to the world? Well, it confirms, if at all confirmation was needed, that UAE is the go-to place for buying and investing in property and setting up ventures in allied sectors such as PropTech. A look at the sector-wise growth of real estate indicates that all verticals have done well, be it residential, commercial, hospitality, or retail.
Expectedly, Dubai scored top marks in terms of the residential sector growth. Average property prices increased by 9.5% yoy, with apartment prices rising by 9.0% and villa prices by 12.8%. Residential rent touched its highest level on record in 2022, going up by a whopping 26.9% yoy. Apartment and villa rents rose by 27.1% and 24.9% yoy, respectively. As for the volume of transactions, it shattered the 2009 record of 81,182 transactions by reaching 90,881. Off-plan and secondary sales also went up by 76.1% and 46.5%, respectively.
Average property prices went up by 1.5% in Abu Dhabi, with average apartment prices rising by 0.9% and average villa prices by 4.1% yoy. Between October and December 2022, total transaction volumes went up 14.9% over 2021.
Not to be outdone, the hospitality sector also witnessed growth, with the total number of international visitors to Dubai reaching almost 13 million in 2022. The average occupancy rate went up by 5.4 percentage points. The average RevPAR increased by 27.8%.
The demand for commercial space saw a marked rise, with the total number of new lease registrations reaching 71,325, up 71.3% from 2021. Average occupancy rates reached 88.0% as of Q4 2022, up from 78.9% a year earlier. Free Zones, such as DIFC, DMCC, and TECOM, witnessed a significant increase in occupation rates.
The retail space saw a great deal of demand, much of it originating from the food and beverage sector. The total number of Ejari (lease) contracts registered in Dubai went up by 10.6% in 2022 over the previous year. The demand for immersive and experiential food and beverage offerings is growing significantly, and, as a result, existing occupiers are expanding their space, and new players are entering the market.
While the Russia-Ukraine war has been disastrous for the citizens of both countries, it has had a tailwind effect on the real estate sector of the UAE, which is, increasingly, being seen as a safe haven for people fleeing from the crisis. Additionally, global investors looking to park their money in real estate are also choosing the UAE as their preferred destination, thanks to a combination of factors ranging from a peaceful environment, stable government, good governance, a high standard of living, and the like. Do not be surprised if 2023 ends on an even more positive note!