The real estate market in the UAE is the second-greatest Arab economy. It has made a solid comeback from the economic slowdown caused by the pandemic. The country’s economy has benefited from various business and social changes. Repressed demands and further refined investor sentiments helped boost property sales, especially in Abu Dhabi and Dubai.
Dubai’s luxury real estate market recorded the third-highest price increase among global communities in 2021, with excellent commercial and residential centers attracting investors in 2022, expressed consultancy Savills on Thursday.
According to Savills World Cities Prime Residential Index, the city’s property market is anticipated to gain capital growth of 4 to 5.9 percent in 2022, after reaching 17.4 percent in 2021. Savills expressed that industrial and residential property will be the most vital real estate investment asset categories worldwide in 2022.
Moreover, as per the statistics published by the Dubai Land Department (DLD) last week, the real estate sector in Abu Dhabi and UAE is back at the center of the limelight, indicating positive signs of sustained growth.
According to The National, the worldwide real estate investment volumes grew 38% to $1.3 trillion in November 2021, compared to 2020. Residential – including student and senior housing and multi-family was the most significant area for investment worldwide in 2021, surpassing office and commercial spaces for the first time, Savills added.
The number of assets zeroing in on property buying hit a record, with 1,250 such funds committing $365 billion in 2021, in comparison to last year’s funds, as indicated by asset data firm Preqin.
In the final quarter of 2021, the Abu Dhabi residential capital value struck a five-year high. As per real estate consultancy ValuStrator villas, the highest yearly capital gains were documented in Saadiyat Island (13.5 percent), Al Reef (13.5 percent), and Al Raha (12.9 percent).
As indicated by industry experts, new initiatives, such as visas for retired citizens and the expansion of the golden visa program, will help profit the domestic property market.
According to The National, rents for villas rose by 2% every year, and rents for apartments increased by 4.1 percent annually.
The average yearly rent for two-bedroom villas is Dh112,000, while three and four-room villa rent were Dh134,000 and Dh210,000 yearly, ValuStrat said.
The average annual leases for studio apartments were Dh51,000, while that for a one-room loft was Dh80,000. The National reported that two and three-room apartment rents were Dh116,000 and Dh160,000.
Abu Dhabi’s most outstanding property developer, Aldar Properties, is building a Dh1. 8 billion ($490 million) sustainable city on Yas Island. Aldar Properties partners with Dubai-based Diamond Developers for this project, expressed Jonathan Emery, CEO of Aldar Development.
As per financial experts, investors are looking three to four years ahead and analyzing the region they are placing money into can draw in renters or visitors, which raises the worth of the property, delivering increased ROI in the long haul. This is the ideal time to invest in Dubai and Abu Dhabi real estate, considering how the prices will consistently appreciate by 2023-24.
Currently, Dubai has a positive environment where interest in properties is also welcomed by real estate investors planning new projects. Danube Group, for example, is one of them. “Business is returning to pre-pandemic normalcy,” stated Danube Group MD Adel Sajan, “We are getting ready to launch various new projects to boost monetary growth,” The Economic Times reported.
Factors that investors must keep in mind before investing in Abu Dhabi or Dubai:
- Gain information on the real estate market condition – Market reports, for example, Bayut’s yearly market reports, are an excellent place if you desire to understand the current market status and practices of property prices. You’ll learn to distinguish which areas had critical declines in property costs and which are offering decent ROI.
- Pick the correct location or neighborhood – Investors should look at the area or community they are investing in more than concentrating on the property type. The place influences the property’s future value.
- You must get your financials in place – Investing in real estate requires lots of funds. Ensure you can deal with your daily budget and bills before purchasing properties.
In addition, different factors like Expo 2020 have boosted the status of the UAE real estate market and further expanded the ROI on the properties. Both volume and price of deals stayed high since the final quarter of 2013, predominantly due to Dubai Expo 2020.
As per Zoom Property Insights, this vertical pattern will proceed upwards even after Dubai Expo 2020. The off-plan and ready-to-move-in properties will stay high in demand as more foreign and domestic investors are expected to invest in the property market.
As per Khaleej Times, “The Expo 2020 welcoming many local and foreign tourists to Dubai and introducing them with its premier lifestyle, a safe haven, and prospect to earn huge income. Ata Shobeiry, Chief executive officer at Zoom Property, is also of the opinion that Expo 2020 positively impacts the real estate market and various sectors of Dubai. The impact will endure longer as the Expo location will be changed into District 2020 while retaining a large portion of its resources and infrastructure. It will draw in more investors,” Shobeiry added.