Resisting the pressures of rising interest rates and inflation with two straight years of turbo-charged growth, Dubai remains a standout global property marketplace, having recorded a double-digit price surge for 2022, according to Property Monitor.
Overall property price growth reached 11.05 per cent in 2022, averaging 0.92 per cent per month— down from 1.33 per cent per month in 2021 when annual price growth was just shy of 16 per cent, but still, a very strong yearly performance, the real estate data platform said in its report.
Last year has been “an incredibly strong year” for the Dubai real estate market as property price recorded a 1.17 per cent increase in December. Property values now stand at Dh 1,089 per sq. ft. according to the Property Monitor Dynamic Price Index (DPI), now back to a level not seen since December 2013 during the last market upswing and in January 2018 on the long pre-Covid down cycle.
The total volume of sales transactions declined 10.4 per cent in December registering a total of 9,131 sales. However, transactions for the month still reached a level that marks the strongest December on record and almost double that of every December since 2014.
Sales performance in 2022 for the residential segment did indeed reach a new all-time high with 86,849 sales displacing the long-standing record of 80,831 sales set in 2009.
“It is perhaps that Dubai cannot be truly compared, on a like-for-like basis, with any other global market owing to its unique position, whereby it has become an oasis, not just in the desert but the world real estate sector. A particular feature of the current demand curve is the stream of interest from across the globe which seems to be fuelled by a near-endless number of taps, from the impact of the Arab Spring on the previous market cycle to Covid-19, to the Ukraine-Russian conflict, and most recently the removal of restrictions in China and the reopening for travel abroad,” said Zhann Jochinke, director of market intelligence & research at Cavendish Maxwell.
According to a report from ValuStrat, villa and apartment prices in Dubai are poised to register a citywide increase of around 7.0 per cent to 10 per cent in 2023 due to strong demand for prime properties. Dubai is expected to see higher visitor footfall this year following the lifting of Covid-19 restrictions in China, a major source market for the emirate’s tourism sector.
Dubai will also get a boost from the upcoming COP28, which will host 140 heads of state and government leaders and more than 80,000 delegates. The newly launched UAE Tourism Strategy 2031 is also likely to boost tourism investment in various related sectors, including travel, aviation and hospitality.
"With double-digit growth recorded in December, Dubai real estate has ended the year 2022 on a strong note. The same pattern can be seen in January, as the market continues its golden run, backed by the support of foreign investors and HNWIs," said Ata Shobeiry, chief executive of Zoom Property.
A report by DXBinteract.com revealed that Dubai’s property market achieved 76 per cent growth in sales in 2022 compared to 2021, with a total value of Dh265 billion. Off-plan property sales grew by 100 per cent registering more than 52,000 transactions worth over Dh124 billion in 2022.
In 2022, developers showed renewed confidence and brought a record 53,000 units to the market in 2022 with a total value in excess of Dh155 billion. Gross rental yields continued to increase with apartments just over seven per cent, making capital and rental returns irresistible for many investors while mortgage volumes remained high buoyed by rising bulk investor portfolio transactions, said the Property Monitor report.
“Should the market be able to maintain the record-setting pace of 2022 we could see in excess of 110,000 transactions next year. Property Monitor analysis, however, predicts that this is unlikely and that some steam and investor froth will inevitably come off the market and transaction volumes should moderate throughout the year ahead,” analysts at the report said.
Source: Khaleej Times