The Dubai property market continues to grow and prosper amidst global challenges. The first half of the year ended on a very strong note as it clocked 43.2k transactions worth AED 115 billion.
June 2022, in particular, produced spectacular numbers. It broke a 13-year-old record by recording 8850 transactions with a combined value of AED 22.10 billion. With these figures, it marked a growth of over 41 per cent as compared to June 2021.
The aforementioned statistics clearly show that the market is on the rise, and it will remain largely unharmed by the global recession. Delving deeper into the data produced by the Dubai property market in the last few months or so also shows that there has been a major shift in demand for properties.
Let’s find out more about how the demand for residential properties is shaping up in the Dubai property market:
A Major Shift in Demand in the Dubai Property Market
Ready Properties vs Off-plan Properties
A market study concluded that buyers are showing keen interest in bigger living spaces, particularly in low-density areas. This is one of the driving forces for the rising demand for ready properties as compared to off-plan properties.
Another factor that has helped shift the focus of buyers to the secondary (ready property) market is that the prices of off-plan properties are on the rise. In fact, they are recording a higher growth rate as compared to ready properties. So, those with budget constraints have started looking for ready properties. Having said that, investors continue to favour off-plan properties because of the benefits they offer.
Luxury Properties on the Rise
Properties for sale in Palm Jumeirah remain high in demand because of the availability of luxury residences. The area, despite having high prices, continues to attract investors and end-users. A similar trend is followed in other areas that house luxury properties.
Based on recent real estate trends, it’s expected that the Dubai property market will double its market share in the current year. The limited supply of luxury properties will also result in their increased demand. With the rising trend of high-net-worth individuals, entrepreneurs, and millionaires setting their base in Dubai, the demand is expected to increase further in the second half of the year.
As per an estimate, around 4,000 high-net-worth individuals will relocate to the UAE in 2022, and a major credit for this goes to expatriate-friendly policies. Furthermore, the reformed business ownership laws are also attracting entrepreneurs in huge numbers.
Apartments vs Villas
Taking into account the data pertaining to project completion in 2022, apartments take the lead over villas. The supply of new villas is also limited as compared to apartments. Records show that only 3.6 per cent of total planned villa deliveries will take place in 2022; resultantly, the price will be on the higher side.
Although new developments featuring villas and townhouses in Dubai are being launched at a rapid pace, the handover is not expected until 2024-end. This means that apartments for sale in Dubai will enjoy higher demand.
The comparatively affordable price tag is another factor that is attracting end-users and investors to apartments. In addition, an array of modern amenities and facilities they come with also makes them a preferred choice of many.
The Changing Dynamics in the Rental Market
The year 2022 is also witnessing changing dynamics in the Dubai rental market. Some areas have recorded an increase in the rent, while others have shown a decline. However, the average rent for villas and apartments has risen by 24.7 per cent and 21.2 per cent, respectively, over the last 12 months. Currently, the average rent for apartments for rent in Dubai is AED 85,204, while villas are available for AED 255,43 per annum.
Among the ones that have shown an increase, Palm Jumeirah happens to be at the forefront for apartments, with average rent has risen up to AED 218,413. Apartments for rent in Discovery Gardens recorded an increase of 4.9 per cent, followed by Living Legends (4.8 per cent), Jumeirah (4.3 per cent), and Downtown Dubai (4.3 per cent).
DIFC, Arjan, Liwan, The Greens, Festival City, and Business Bay are other prominent communities where rent for apartments has increased. On the other hand, Green Community, The Old Town, and Deira are the areas where the rent for flats has declined.
When it comes to villas for rent in Dubai, Emirates Hills and Jumeirah Islands, with 4.9 per cent each, registered a higher increase. It was followed by The Sustainable City (4.8 per cent), Victory Heights (4.6 per cent), Jumeirah Golf Estates (4.3 per cent), and Mudon (4.3 per cent). The Meadows, The Springs, and Green Communities have seen a decline in the rental values of villas in Dubai.
In a nutshell, the Dubai property market is expected to continue its upwards trajectory during the second half of the year and beyond. Villas and luxury properties will continue their dominance, while apartments will also show growth.