Dubai real estate continues to soar in Q1 as government policies boost investor confidence

The Dubai real estate market continued to soar in first quarter of 2022 as average property prices recorded strong double-digit growth in response to the government policy measures announced early this year, according to a latest report.

CBRE, which released its UAE real estate market review for first quarter of 2022, said average property prices in Dubai surged 11.3 per cent during the January-March quarter with average apartment prices rising by 10 per cent and average villa prices surging by 20.1 per cent.

In Abu Dhabi, average prices rose by 1.5 per cent in the 12 months to March 2022, with average apartment and villa prices up by 1.6 per cent and 1.1 per cent, respectively.

Upward trend to continue

Analysts and markets experts said the growth in real estate sector will continue this year as the government policy measures such as visa reforms and modification of the working week have built confidence among investors and end-users in the market. In addition, they said ease of doing business, revival of economic activities and future growth plans have made Dubai even more attractive to investors looking to grow or expand the business in the region.

“Both activity levels and performance in the UAE’s real estate market have seen a marked upturn over the course of the first quarter of 2022,” Taimur Khan, head of research for Mena region at CBRE in Dubai, said.

Looking ahead, he said there are some potential headwinds which may impact performance, namely interest rate higher and persistently high inflation.

“Given the raft of changes to social and regulatory policies and the enactment of a range of federal and local government initiatives, we feel there are strong fundamentals underpinning future performance in the UAE’s real estate sector,” Khan said.

Strong start in 2022

The CBRE report further said as many as 7,812 residential units were delivered in Dubai during the January-March quarter and an additional 56,871 units are scheduled to be delivered in the remaining three quarters of the year.

Ata Shobeiry, chief executive of Zoom Property, said the strong start to the year for the UAE property market is a welcoming sign for investors and buyers.

“While Dubai’s real estate sector was expected to perform better after a splendid 2021, Abu Dhabi and Sharjah markets have also surpassed expectations with steady growth. With the delivery of more than 9,500 and 7,800 units on cards in Abu Dhabi and Dubai, respectively, better results can be expected during the rest of the year,” Shobeiry told Khaleej Times on Wednesday.

Highest-ever transaction

Dubai’s total transaction volumes reached 19,009 during the January-March period, highest ever recorded in the first quarter of the year. The CBRE report said total transactions volumes recorded 75.1 per cent year-on-year growth during the quarter with off-plan and ready transactions increasing by 114.9 per cent and 52.9 per cent, respectively.

Moreover, secondary market transactions accounted for 56.1 per cent of total transactions in first quarter with off-plan transactions accounting for 43.9 per cent of the total. However, it is important to note that 68.6 per cent of total sales during this period were initial sales from the developer, that is the first sale of the property, whereas 31.4 per cent of sales were second or subsequent sales of properties.

— muzaffarrizvi@khaleejtimes.com