During the second quarter of 2022, the UAE real estate market is standing firm on its ground. Despite the global headwinds and rising inflation concerns of the world government, the UAE real estate market has shown little to no effects. In fact, the geopolitical tension that was experienced globally paved the way for UAE to rise above all as a safe destination to visit, live, work and invest in.
So what exactly gives UAE the upper hand amongst all, and why is the real estate market booming in 2022?
Well, most of the credit can be given to the pandemic of 2020. Since the pandemic forced the majority of people to make their homes their workplace, a school for kids and the only place for dining and entertainment, the majority sought to make it all better.
A massive surge in the waves of residents who wanted to upgrade their living standards was seen. The majority preferred five-bedroom villas or three-bedroom condos in the UAE. After all, UAE is, in fact, blessed with ethereal infrastructure, a robust security system, and not to forget the amplitude of opportunities to grow.
The subconscious fear of another lockdown in the minds of residents lead to a demand for waterfront and beachfront apartments as well. People, as a matter of fact, are now more driven towards improving their living experiences than before.
If you are wondering why this surge in demand is leading to the UAE real estate market’s potential rise, then read on as we explore it all.
Change in trends
As previously stated, the lockdown and pandemic led to a trend of buying real estate that would relish strong vibes. People have been more concerned about their living standards since the pandemic. One major trend observed in the UAE, the real estate market, has been the rise of demand for five bedroom villas and townhouses in Sharjah. In fact, in the last six months, the demand has surpassed the supply. As a result, prices in some UAE communities have increased by as much as 30 percent.
The real estate properties in Abu Dhabi also follow the same trend of rising demand. In areas of Abu Dhabi like Saadiyat Island and Yas Island, the demand is exceptionally high. With the booming real estate market, the supply of villas is currently low, which has put the sellers at a distinct advantage when it comes to controlling the selling prices.
One reason the demand for the real estate market in the UAE has spurred is the pandemic and low-interest rates. Communities all across the country are now preferring real estate with outdoor spaces and gardens. As a result, the prices and occupancy rates of the UAE real estate market have been boosted as well. With the loss of jobs and good supply levels, the apartment rates, on the contrary, have been surprising.
As per the sale transaction data in the UAE, another crucial factor that has led to the support of the villa/townhouse market is the ability of individuals to save money. Following the pandemic, people did not have many opportunities to spend. As a result, this led to a good position for buyers when the lockdown was eased.
The statistics for real estate
In 2022 the UAE property market has been continuing to flourish. The market ramp-up has been witnessing record-breaking growth since the last quarter of 2021. For instance, the property deals in Dubai more than doubled last year as it broke down a 12-year record for the value of sales. Almost 80 per cent of property professionals surveyed over the past 12 months are confident that the real estate market will grow.
In the year 2021, Dubai recorded more than 52,000 apartment and villa real estate transactions totalling almost Dh 114.2 billion, which is more than the total collected in 2019 and 2020 combined. Meanwhile, 15,000 property transactions have been made that have led to a total value of Dh 71.5 billion dirhams in Abu Dhabi last year.
High demands & prices
With the rise in demand for UAE real estate, the prices have exceptionally risen as well. According to Dubai-based property experts, this factor alone is not capable of putting a dent in the demand. A recent analysis of the demands has shown that the prices in January 2022 have been higher as compared to August 2021. The monthly transaction volumes have grown as much as 2.1 percent. Moreover, residential segments like villas and townhouses have steadily increased in demand.
Recent insights from the market foretell that villas will account for 15 percent of the new stock, which is expected to come to the UAE real estate market between 2022 and 2025. This notion alone has hinted that villas are going to outperform apartments in the UAE. In 2021 alone, 37,000 residential units, including 5,900 villas, were delivered.
The UAE, real estate market, has been booming since the pandemic, and the numbers speak for themselves. After all, the given infrastructure of Dubai and others like Sharjah and Abu Dhabi is exceptional.
Based on the shifting marketing conditions, the estimates for the future will have to be adjusted. With a low supply and high demand ratio, right now, the UAE real estate market is flourishing like no other. The rise in demand, however, is expected to be constant.
Other factors that have contributed to the booming effect seen in the UAE real estate market are the government initiatives. The pro-active reforms like the introduction of the Golden Visa and the transition towards a digital economy have added zest to the UAE real estate market.
To sum it up,
The UAE real estate market is booming due to government initiatives, the pandemic and reforms. With the country’s infrastructure being one of a kind, there is no doubt that a rise in demand for villas and apartments in the UAE is constantly being observed.
Cities like Dubai and Abu Dhabi have one of the most oscillating effects on the transition from potential buyers to customers. Everyone is looking for something new in the market, and with the real estate market on the rise, change is bound to happen.