UAE real estate: Sales grow, prices remain buoyant
The real estate market of the UAE has long beckoned international investors and property buyers. A committed, proactive government with a sharp focus on economic progress and sustainability and the high incomes of the citizens has been ensuring that the property market of the UAE will continue to do well in the foreseeable future.
The third-quarter performance has been quite encouraging, with the real estate sector building momentum across the board — residential, office, retail and hospitality sectors all exhibited uniformly good results during the said period. Much of the credit goes to the government’s reforms, initiatives such as the Golden Visa, all the hard work put in to increase tourism, the push towards transitioning to a knowledge-driven economy, and so forth.
A rebound in global travel and the resulting increase in tourism, as well as the retail activity surrounding the FIFA World Cup, too, worked to the advantage of the real estate sector in Q3. What is particularly noteworthy is that the sector has done well in spite of niggles such as the strengthening of the dollar in the foreign exchange market and rising interest rates.
Facts and figures
A look at some data will help put things in perspective: In the first six months of this year, 60% more property transactions were made than in the same period last year, with the overall value, pegged at 85%, increasing. Average residential prices went up by 9% Y-o-Y in Dubai, while average rental rates shot up by 25% Y-o-Y, with both sales and rentals bolstered by strong demand and increased buyer activity. As many as 6,000 apartments were delivered, with villa supply increasing significantly.
In Abu Dhabi, the residential market recorded the delivery of almost 1,000 apartments in the third quarter of 2022 across Al Raha Beach, Reem Island, Yas Island and Saadiyat Island communities. A number of noteworthy projects, among them 240 villas, were launched. Once completed, around 500 residential units will come into the market.
Positive growth: The writing is on the wall
An analysis of the third-quarter results underlines one major factor: The growth of the real estate sector, as well as prices, are being fuelled by investor and end-user demand across the UAE. Off-plan sales are pretty good, and the secondary market sales are also on the up and up. Buyers using mortgage finance to purchase property are hurrying to lock in fixed rates in case both interest rates and rents happen to shoot up soon.
Investor demand has been a notable driver of prices in the third quarter, as it has been in the preceding quarters, with investors concentrating on the off-plan market. At the same time, sales in the secondary market also picked up in Q3. Overall, the strong momentum in UAE’s real estate market continued unabated in the third quarter of 2022, with new project launches growing steadily.
The sector will remain bullish in the quarters to come, thanks to a healthy demand for luxury villas and apartments and an influx of global investors and high-net-worth investors, who will keep the market strong through sustained activity levels.