The property market in the United Arab Emirates experienced the fastest growth in the EMEA region in 2021, and nearly 80 % of property professionals are convinced that the UAE property market will continue to gain momentum during thethe current year.
Whilst the UAE’s ultimate aim is to position Dubai as the world’s leading tourist destination and global trade hub, the Tourism Board’s mission is to raise its profile amongst the international public and attract foreign tourists and investors to this futuristic El Dorado.
2021: an unprecedented record year
The figures speak for themselves. The Dubai property market proved remarkably resilient during the pandemic.
Having been in decline since 2017, the UAE economy has been severely weakened by the Covid-19 pandemic due to the collapse in oil prices, given that the government’s revenue relies predominantly on hydrocarbons. As a result, the UAE’s GDP contracted by 6.1 per cent in the third quarter of 2020.
The pandemic has also hit the non-hydrocarbon sector hard; this sector relies mainly on services (tourism, property, retail, air and sea transport), with Dubai at its forefront. The non-oil sector thus recorded a contraction of 6.2% in 2020.
Nevertheless, the country’s economic fundamentals have remained strong thanks to Abu Dhabi and a gradual recovery in economic activity. In the final quarter of 2021, the United Arab Emirates’ property market experienced record growth since the start of its expansion.
In November 2021, Dubai recorded its best month for sales ever, with a total of 6,989 transactions worth 17.95 billion dirhams.
In terms of transaction volumes, Dubai recorded a total of 60,900 for 2021, representing an increase of 75 % compared with 2020 and an increase of 55 % compared with 2019.
This trend can be attributed to a number of key factors in 2021:
– The authorities in Dubai have responded particularly well to the Covid-19 crisis, and the situation was brought under control swiftly with a mass vaccination programme from the very start of the pandemic. As for the health protocols, these were generally adhered to by both the local population and tourists.
– A a dramatic rise in the number of estate agents around 57%, working for more than 1,800 estate agents in Dubai.
– The support for the World Expo, which began in October 2021. An event that led to a surge in tourist numbers.
– A unprecedented demand from global investors looking for alternative options for residence and citizenship in the wake of the upheaval and uncertainty caused by the COVID-19 pandemic.
– The’strong demand for luxury properties where the volume of sales of flats worth more than 10,000,000 AED has increased by 235 % compared with 2021 and 115 % compared with 2013.
Some figures on the trend in the number of sales recorded for 2021 in Dubai, by property type (according to the Dubai Land Department):
39,600 flats (+60,981 TP3T compared with 2020)
8,700 villas (85,691 TP3T compared with 2020)
2,400 commercial premises (103,71% compared with 2020) 10,300 plots (115,53% compared with 2020)
A closer look at property price trends in Dubai in 2021
It is important to note that the Dubai property market in 2021 is characterised by three major trends: a rise in demand for luxury flats, a massive increase in villa sales, and a sharp rise in rental prices across the city.
It has thus set new all-time records, including the highest sales value ever recorded – over 150 billion AED – and one of the highest sales volumes since 2013, with more than 60,500 properties.
It was also the best year ever in terms of off-plan property sales, with 25,000 properties sold throughout 2021.
It is also worth noting the highest volume of villa sales ever recorded in Dubai’s history, with around 7,580 off-plan villas and 6,000 resale villas. As for flats, a record has also been set here since 2013, with sales figures soaring to 39,570 flats.
In addition to this, more than 35,000 properties have been completed and a further 21,500 have been launched. More than 55,000 properties are scheduled for completion in 2022.
As a result, the property market in Dubai has bounced back and has outperformed expectations by a wide margin.
A global event, but one that is having an impact on property prices in Dubai
The year 2021 saw 25,280 off-plan transactions, representing an increase of 51 % compared with 2020, whilst transactions in ready-to-move-in properties rose by 92 % compared with 2020 to reach 36,400 transactions. Fäm Properties recorded more than 35,000 unit handover in 2021. Emaar topped the rankings with 20%, followed by Damac with 16% and Dubai Properties with 4%.
We have therefore set out the main investment areas that have been particularly popular with investors in 2021:
- MBR City, 13,447 (11 %)
- Business Bay, 12,458 units (11 1Q3Q)
- Marina, 7,214 units (6 %)
- Damac Hills, 7,210 units (6 %)
- Downtown, 5,908 (5%)
Compared with 2020, the number of units launched increased by 69,83 % to reach more than 21,700 units, or 103 property developments. The properties launched are mainly concentrated in Mohammad Bin Rashid Al Maktoum City (3,626 units), Damac Hills Dubai (3,377 units), Business Bay (1,898 units), Jumeirah Village Circle (1,535 units), Dubai Investment Park (1,174 units), Al Furjan (1,168 units) and Arabian Ranches (1,023 units).
Dubai, a fascinating property destination
The leading city in the Persian Gulf welcomed 7.28 million visitors from around the world, staying for one night or more, between January and December 2021.
Representing a year-on-year increase of 32 %, this marks a significant milestone in the recovery of global tourism and sets the city on the path to sustainable growth, on course to become the world’s most visited destination.
According to the latest figures published by the Department of’Dubai Department of Economy and Tourism (DET), international visitor numbers to the city exceeded 3.4 million in the fourth quarter of 2021, reaching 74 % of the total number of tourist arrivals prior to the pandemic in the fourth quarter of 2019.
As for hotels and their occupancy levels, they have even surpassed pre-pandemic figures, with an average hotel occupancy rate of 67 %, making it one of the highest occupancy rates in the world.
This positive trend is expected to continue throughout the current year. Indeed, the visitor figures for 2021 demonstrate the destination’s resilience and the recovery of the tourism sector.
They reaffirm the sector’s leading role as a key driver of economic growth, whilst further lending credibility to Dubai’s recent accolade as the world’s most popular destination in the 2022 Tripadvisor Travellers’ Choice Awards.
Property prices in Dubai are much more affordable than in other major cities around the world.
Indeed, one need only compare property prices – particularly per square metre – in Dubai with those in other cities such as Paris, London or New York to see a striking difference. Similarly, the Dubai property market is managed both effectively and efficiently.
The report states that the first half of 2022 saw a number of successful and notable project launches, driven by renewed optimism in the property market. This optimism was initially fuelled by a very strong secondary market.
