The real estate market in the UAE has been rapidly recovering since the end of 2020, with Dubai’s residential sector seeing the largest number of transactions. Let’s look at the current prices and trends in the UAE housing market in more detail below.
Contents
- UAE housing market forecast for 2022
- Post-pandemic property prices in Dubai
- Is residential property a good investment?
- Opportunities of residential sector in Dubai, UAE
- Property prices in Dubai
- Best areas to invest in real estate
- Real estate professionals to help you find your perfect home
UAE housing market forecast for 2022
Going into 2022, we expect to see the uptrend continue. “The prospects are positive. This is not just an assumption, but a fact based on reasonable factors. In my opinion, the recovery was belated, but as the pandemic has eased, it is speeding up," quotes the Khaleej Times Atif Rahman, a real estate expert in the UAE.
This idea is confirmed by the growing number of sale transactions. Property monitor posted a new property sales record since the pandemic in the third quarter of 2021. In total, 15,406 transactions were registered, which is 81% more compared to the same period in 2020 and 48% more than in 2019. At the moment, there is a rise in prices, although not stable.
Provided that current conditions remain in place, 2022 will see apartments prices gradually growing amid fewer new offers, providing owners with an opportunity to cash in on reselling their properties. Despite the increase in value in some areas, it is still possible to find inexpensive apartments in Dubai.
To support demand from foreign buyers, the United Arab Emirates government has introduced several local and federal regulatory changes for overseas investors to safely buy apartments and run their businesses in the country. The measures will also be relevant throughout 2022.
The official website of the UAE Ministry of Economy names the following initiatives aimed at supporting foreign investors:
- 100% ownership of a company. Investors of all nationalities can launch and fully own companies in the UAE. This change took place following the entry into force of the Law on Commercial Companies in 2020, according to which a foreign company wishing to open a branch and operate in the UAE does not require the presence of a national UAE agent;
- 40 free-trade zones for company registration. More than 40 free-trade zones provide tax breaks and 100% ownership to foreign investors. The UAE also provides investors with great flexibility;
- With the entry into force of Federal Law No. (26) 2020 on commercial companies, foreign investors are allowed various forms of legal ownership, such as public joint stock companies, private joint stock companies, limited liability companies, limited liability partnerships and partner companies;
- No minimum capital for limited liability companies;
- No income tax;
- Resident visa for investors;
- Low customs fees.
Post-pandemic property prices in Dubai
The real estate market is growing steadily across the board. For example, in the first half of 2021, compared to the same period in 2020, 44% more completed properties were sold, according to Arabian Business. Villas became the most popular type of housing, as after self-isolation, buyers were more interested in spacious areas and amenities.
Among other things, Expo 2020 Dubai which was opened on October 1 is aimed to fuel interest in the emirate’s residential real estate. Foreign guests are expected to rent and buy more properties in the Dubai, sending prices for UAE apartments higher in 2022.
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Is residential property a good investment?
The main reason foreigners buy homes in the emirate is long-term residency offered through investment in real estate. Particularly, entrepreneurs and property investors can count on a simplified procedure of residence visa issuance.
The statistics provided by Property Monitor prove the effectiveness of the UAE government’s policies:
- From the beginning of the year, the number of transactions increased by 120%, compared to the same period in 2020;
- Since January 2021, the cost of properties in the price segment from AED 1 to 3 million has increased by 6.6%;
- The volume of transactions in September was 5,670. This is the highest figure in September since 2013;
- 62.4% of transactions on average accounted for completed properties in the last 12 months.
Opportunities of residential sector in Dubai, UAE
Savvy foreign citizens can take advantage of some of the most solid investment opportunities by buying a home in Dubai. This is because of the following reasons:
- Possibility of buying an apartment using a mortgage (from 2 to 4% per annum) or by installments;
- High ROIs. On average, the rental income in Dubai, according to the RightDeed portal, is 5.8%, but sometimes it reaches 7%, depending on the characteristics of the property and the form of lease that the owner uses;
- Favorable conditions for foreign investors and entrepreneurs
- No taxes on professional income and profits
- Residence visa for investors and their family buying real estate worth at least $273,000
- Freehold areas where non-nationals can own a property in Dubai
The year 2021 saw the UAE property market booming, with sky-high demand from prospective buyers interested in quality apartments and investors in search of greater returns.
As a result, in September 2021, the highest monthly sales value was recorded since December 2013, namely 5,762 sales transactions worth more than AED 16.2 billion, leading to the fact that the total value has exceeded AED 100 billion, according to Dubai Land Department.
Buying homes online
Digital technologies simplify and streamline the home-buying and selling processes. This is especially the case for those who cannot be physically present in the country.
It has become an increasingly popular way to buy during the lockdown, helping the property market to survive the pandemic. Thanks to the UAE government, the online property purchase procedure has been simplified and accelerated, attracting many solvent foreigners.
What are the benefits of buying a property online?
- Searching, viewing, and buying a property in the United Arab Emirates from the comfort of your home
- Virtual property tours
- Online negotiations with the agent and the owner at a convenient time
- No extra expenses for flights, hotel fees, translation services, etc.
- The transaction is completed within a few weeks
What experts expect
Property Monitor analysts shared some of their findings on the upcoming situation in the Arab housing market in their September report. According to the report, the effect of the opening of the EXPO has not clearly reflected on the market, but it will definitely have a positive impact on the last quarter of 2021 and the first half of 2022, when new investors attracted by relatively affordable prices will “take over” the new housing sector.
The same goes for the off-plan property market. Buyers will be attracted by affordable prices, a wide range of offers and favorable conditions from developers.
Property prices in Dubai
Below are average prices for apartments in the emirate.
| Price category | Average price | Square meter price |
|---|---|---|
| Cheap real estate in Dubai under $234,460 (€200,000) | $175,845 (€150,000) | $157 (€134) |
| High-end apartments from $1,172,300 (€1,000,000) | $4,689,200 (€4,000,000) | $35,169 (€30,000) |
| All properties | $1,728,003 (€1,474,028) | $13,610 (€11,610) |
Prices for villas and townhouses
| Price category | Average price | Square meter price |
|---|---|---|
| Villas and townhouse under $351,690 (€300,000) | $294,967 (€251,614) | $1,832 (€1,563) |
| High-end homes from $1,172,300 (€1,000,000) | $5,460,705 (€4,658,113) | $76,618 (€65,357) |
| All properties | $4,036,915 (€3,443,586) | $54,379 (€46,387) |
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Best areas to invest in real estate
Choosing the right property is vital to a successful investment. If you are wondering what area is the best to buy an apartment in Dubai, consider the following locations. They offer a comfortable, affordable living experience and bring the highest returns.
Discovery Gardens is a residential community in the popular Jebel Ali metropolitan area. It is an important commercial hub and industrial center. It has everything one needs for a comfortable way of living and doing business, promising at least 8 % of rental yield. Prices for 2-bedroom apartments here start at AED 417,000.
International City is a mixed-use development which includes 10 residential clusters named after countries around the world. Multiple shops, cafes, picturesque parks, kindergartens, schools, and clinics are a boon for its residents. The price tag of a home here is from AED 300,000. The rental yield is between 6.5 percent and 8 percent.
Downtown Dubai represents an unrivalled opportunity for investors to capitalize on this world-famous district with the rental yield starting at 7 percent.
As you can see, Dubai offers a plethora of real estate options, making the property choice a no easy feat for a first-time home buyer. Although, most homes are concentrated in comfortable areas with amenities. Developers carefully think over the infrastructure so that the completed projects become comprehensive communities.
Last-minute offers
Real estate professionals to help you find your perfect home
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