The Dubai real estate sector is turning vibrant and more attractive due to reforms introduced by the government, investor-protection laws, and amendments in visa policies. These few factors tend to attract local and international property investors, which is translated into the escalated numbers of the transaction concluded in June 2022, which is considered the best since 2009. Dubai real estate is getting better in terms of transactions and promising with every passing month.
Several Dubai real estate agents have assessed the robust demand, mounting interest from local and foreign investors and the positive momentum of the Dubai real estate market. These all assessments are drawn based on the Dubai real estate sector’s exceptional performance, as the sector concluded the first half of 2022 on a positive note. With almost 43,000 property sales transactions worth over AED114.5 billion, it is going to be the best performing first half ever.
“These numbers both in terms of sales transactions and property prices indicate a strong real estate market, with the first half showing the best performance in a long time,” states Ali Mustafa.
Dubai real estate sector has been performing exceptionally well, lately and Dubai luxury properties are expected to continue to rise in demand in the second half of the year 2022. The reasons can be many including the strong momentum of the market and also because there is a limited stock of prime and ultra-luxury properties that is not enough to cater to the rising demand of potential local and foreign investors.
The demand for luxury properties for sale in Dubai has been on the rise since the second half of 2021, when the UAE government lifted the ban on international travelling. When high net worth individuals and millionaires visited this city and were looking to relocate to this city or buy a second home in Dubai.
According to an estimate, around 4,000 high net worth individuals are expected to relocate to Dubai this year. It is due to excellent steps taken by the UAE government and concerned officials to manage the COVID-19 induced global pandemic, successfully hosted the Expo 2020 event in Dubai, introduced some incredible amendments in residence visa programmes and started offering 100 per cent foreign ownership of companies.
Moreover, the Russia-Ukraine war also drew investment into Dubai real estate sector from the affected countries. Currently, Dubai’s Prime Property Sector Inching Towards $100 Million Deals.
Seeing the demand for prime and ultra-prime properties for sale in Dubai, it can be said that this sector will prove to be more resilient compared to the affordable and mid-market segment during 2014-2020. 2021 saw the highest luxury properties demand and transactions over AED10 million in the last decade, with Palm Jumeirah accounting for nearly 35 per cent of these transactions.
“The demand for prime residential properties for sale in Dubai continues to be stronger in the first quarter of 2022, with transaction volumes touched more than AED10 million being 140.2 per cent higher than the same quarter of 2021,” according to an estimate. When the data was further analysed, we can find that villa transactions exceeded apartments as 305 villas and 178 apartments were sold in the first quarter of 2022 compared to 150 villas and 51 apartments in the first quarter of 2021.
Is it true that the limited supply of prime properties for sale in Dubai has pushed the demand higher and gained more interest from potential buyers? Moreover, high transaction volumes are recorded compared to 2021, due to which the ready-to-move-in luxury properties stock was already grabbed by high net worth individuals.
According to these numbers, it is clear that Dubai’s luxury property market is witnessing a record number of transactions but it still forms a small fraction of the overall Dubai property market. However, seeing the interest and demand from potential investors, the experts believe that the luxury property market is expected to double its share this year.
According to a Core report, “To give perspective, transactions above Dh10 million formed only 3.3 per cent of all the secondary market transactions and 1.4 per cent of all the off-plan market transactions over Q1 2022.”
The supply of good quality, contemporary, and state-of-the-art properties is limited, the demand will outstrip the supply in the short term.
2021 witnessed a significant number of deals in Dubai’s luxury property sector and the first half of 2022 has successfully garnered the interest from potential local and foreign investors. It will not increase the number of transactions but also play a key role in the growth of the Dubai real estate market.
With more projects in the supply line, and more developments featuring luxury properties complemented with ultra-modern amenities, we can expect an exciting second half of this year. This year will conclude with better figures for the Dubai luxury property market, because the sector has been attracting high net worth individuals from everywhere in the world.