CBRE’s latest Dubai Residential Market Snapshot report uncovers steady growth in Dubai’s residential market.
In August 2022, Dubai’s residential housing market recorded 9,257 transactions in total. This is up 70.5% from the same month last year. Off-plan and secondary market sales also experienced respective increases of 68.5% and 72.4% within the same time frame. The overall number of transactions from the start of the year till August 2022 was 55,108, which is the most since 2009, within the same period.
The average prices and rents of residential real estate rose across the board in Dubai during the 12 months until August 2022. The average price for apartments and villas increased by 7.7% and 15.8%, respectively. But rents experienced an even greater increase in prices. The price of rent for apartments and villas increased by 24.9% and 24.2%, respectively.
Despite these substantial increases in average prices and rents, the average rates are still below their peak in 2014. At present, the prices of apartments and villas are respectively 24.7% and 7.3% lower than their peak.
DUBAI OFFICE RENT ALSO EXPERIENCING INCREASES
Following the trend of increases, Dubai office rents have increased more than in London and New York. The significantly greater number of businesses and employees returning to office work is a strong cause of this. In fact, more than 80% of employees in Dubai are back to working in an office. This dwarfs the average office occupancy rates in USA and London which come in at 43% and 40%, respectively.
GROWTH TO STILL OCCUR IN DUBAI PROPERTY MARKET, BUT AT A REDUCED RATE
Rising borrowing costs are presenting a weaker than anticipated demand in Dubai’s real estate market. Other factors causing this outlook are the rising cost of living, increased mortgage rates, and the projected new supply of Dubai real estate. Yet, prices and rents of properties in Dubai will still increase in the future, albeit to a lesser extent than previously.
Overall, Dubai’s real estate market will continue to be a very attractive market to both live and invest in. investor-friendly laws such as its strong property advertising restrictions and extra transaction reporting obligations are a key component of this from an investor’s standpoint. But equally, Dubai’s Golden Visa Scheme offers attractive incentives for highly skilled people to work or study in the UAE for up to 10 years.