Investment
Properties News
June 2022 Dubai Real Estate Market Report
Real estate prices have just recorded their first monthly decline in 2022.
Falling by 0.31% in June. And with the world economy looking unstable at the moment, this may look bad at first But wait until you hear this… Even though property prices fell, The volume of transactions has increased! That’s 34.2% higher than the previous month. And 38.8% higher Than 2021!
This shows that there is nothing to worry about the prices falling by 0.31% is a sign of a healthy market that can grow sustainably.
But let’s dive deeper: New off plan development projects are on the rise! 5175 new units have entered the market for sale worth AED 13 billion. And many of these are bought using a mortgage which is on the rise! More people are taking mortgages now than ever, With June Recording the highest number of mortgages taken! This has made the mortgage volume Jump by 40.5% in June, and almost half of the loans taken Are for residential properties!
And here’s more good news!
In June, emirate-wide average gross rental yields rose to 6.37% , the highest level since pre-pandemic! As a result further growth in yields are expected over the coming months !
DUBAI PROPERTY MARKET OVERVIEW
The Dubai property market has all but recovered from the effects of
the Covid pandemic. Q1 has been a period that has seen the city
deliver a number of records being broken within the real estate
market, including the largest single sale transaction in Dubai’s history,
with the AED 280 million sale on Palm Jumeirah. This sales transaction
exemplifies how the luxury property sector in Dubai is seeing
increasing demand.
Our analytics data shows a 400% year-on-year increase in digital
traffic for villas and apartments in the Prime and Super Prime space.
This is reflected by the high numbers of HNWIs coming to Dubai to buy
a principal residence or an investment property. In recent years,
Dubai has thoroughly established itself as a prime global destination
for purchasing a home, which has led to overall transaction prices
continuing their year-on-year growth so far in 2022.
Villa communities, which saw a surge in demand following the onset
of the Coronavirus pandemic, are continuing to see a very high level
of enquiries, with inventory issues now coming to the fore. This has led
to an increase in prices for these communities, which has pushed
some buyers toward purchasing off-plan villas and larger
apartments.
Apartment complexes with high-end resort style amenities, such as
those in Downtown and Palm Jumeirah, have seen a massive uptick in
both interest and transactions. This move towards apartments helps
to explain why average property sizes have gone down, despite
average transaction prices increasing.
This flurry of demand for prime and super prime apartments has also
pushed prices up, causing considerable year-on-year growth. With
the lack of available inventory in villa communities, we envisage the
number of transactions for apartments to continue rising - this will be
further supported by the few numbers of off-plan projects that are set
to hand over in the coming year.
Dubai’s property sector finds itself in a very strong and stable position
as of Q1. Geopolitical tensions elsewhere in the world serve only to
underpin Dubai’s position as a safe haven especially in terms of the
Prime and Super Prime property segment. Q1 is indicative of what the
remainder of 2022 has to offer. Dubai is well placed to have a solid
year ahead, with the expectation being continued growth in the short
to medium term.
