The UAE real estate market given the robust infrastructure of the country and its performative values is one of a kind. With various options to choose from in terms of real estate properties, the UAE has exceeded all the real estate industry’s normative thresholds.
Options like Condos in Dubai and Villas in Sharjah add zest to overall market trends in real estate. These trends have a fundamental role to play when it comes to buyers and sellers.
The trends of the market basically determine the direction of flow for the industry. The influx of monetary funds and investments by foreigners and residents of the UAE makes it hard to predict the trends without thorough knowledge.
In order to bridge the gap between theoretical numbers and reality, we have shortlisted the key trends impacting the UAE real estate market. Given their influence, these have been divided into macro and micro trends. If you are interested in the UAE real estate market and the trends it follows, then read on to find out more.
Macro Trends
The economic growth of the UAE has been phenomenal in many ways. Options like 5 bed villas in sustainable city Sharjah and 3-bedroom condos in Dubai that overlook a beach seem lucrative, especially since the lockdown ended.
During the pandemic, a singular realization in regard to the importance of living standards materialized. Given the magnitude of duration and impact that the pandemic has left upon the lives of residents, the trends are focused on a luxury lifestyle.
Due credit in regard to the development of real estate in the UAE has to be given to the government as well. In its pursuit to encourage buyers and investments, the government embarked upon several initiatives and reforms.
Initiatives like the 10-year visa (golden visa) proposed by the UAE government have been seen as one of the most astounding options by most foreigners. The purpose of this initiative has been to encourage long-term residence and retention of talented individuals in the country.
Moreover, the reforms around ownership of companies in the emirate have also encouraged growth. According to new laws, a local sponsor is no longer required. Given this initiative, individuals have opted for the UAE and its real estate sector.
Another major trend in the real estate sector is embracing a global work week from Monday to Friday. This decision has helped propel the emirate’s position both in terms of trade and transport. The country takes pride in its status as a financial hub and a tourism destination.
With the development of real estate properties all around it, UAE enjoys trends in the luxury sector. The residential sector, however, is not far behind. With interest in villas/apartments exceeding in time, the demand is quite high now.
According to the UAE Central bank forecast, there is a prediction of 4.2 percent GDP growth in the year 2022. This would be double the growth rate that was achieved in 2021. With population growth expected to hit new records, affluent population movements are expected to increase.
The majority of trends in the UAE focus on sustainable energy growth and luxury lifestyle in Dubai. As a result, an acceleration in terms of growth within the economy is expected.
Microtrends
The stellar performance given by the real estate market of Dubai and Sharjah in 2021 has caught the attention of property investors from all across the globe. These include Paris, London, New York and Hong Kong, to name a few.
The infrastructure and population growth of the UAE has outperformed the global real estate market and competitors. In fact, Dubai has ranked third globally amongst the cities with the highest residential capital growth. It was recorded to be 17 percent as of 2021.
In terms of transactions within the real estate market, the year 2021 has seen the highest values. In the previous year, the market reached Dhs300bn in terms of growth and revenue made in the real estate sector.
In 2021 the real estate market of the UAE had seen a great change in demand/supply in terms of capital values. The best-performing sub-sectors of the real estate market were found to be ultra-high-end segments. These included townhouses/villas, with both registering double-digit growth year-on-year.
As a result, the trends in the real estate market have been exceptionally focused on villas. With buyers more interested in outdoor spaces and freehold leases, the rise in demand for the real estate sector of the UAE has been unmatched.
Despite the relatively low supply and high-end demand from affluent individuals who have shifted to Dubai and residents who sought larger living spaces, the villas/townhouses sector saw robust growth in 2021.
One of the core trends observed in 2022 has been the rise in demand for luxury real estate in Dubai. Despite the challenges imposed by the pandemic, the elites have been exceptionally interested in the real estate market of Dubai.
The luxury housing sector in the year 2021 recorded a 40 percent surge in prices as compared to the preceding year.
With 4,038 deals on deck and a 30 percent jump in transactions of luxury homes in Dubai, home sellers are now delaying selling their homes. The expected annual jump is 10 to 15 percent, especially in the prime areas of the emirate.
In the year 2022, the luxury property market is expected to retain an upward trend. With more upscale buildings and projects on the rise, all eyes are on the trajectory. Consequently, trends have predicted that wealthy foreigners will show interest in the luxury sector of Dubai.
To conclude
In the year 2022, the real estate market development trends seem to be set for growth while maintaining momentum in the direction of villas/townhouses. The continuous influx of capital within the UAE real estate market sets it in an ideal position for growth and development.
Investors this year have found that despite inflation and interest rate hikes on the horizon, the real estate sector is ideal for hedge investments. In cities like Dubai and Sharjah, the environment is particularly ripe for further growth as new catalysts continue to emerge.
