In the year leading up to the second quarter of 2022, the prices of homes in Dubai increased by 4.04%.
Amidst generally improved economic conditions, the real estate industry in the UAE is currently exhibiting substantial growth once more. Following a year-over-year growth of 7.54% in the previous quarter and 2.9% in the same period the previous year, prices of residential property in Dubai increased by 4.04% in the second quarter of 2022 compared to the same period the previous year. It was the fifth consecutive quarter in which annual prices increased, after having steadily decreased from the first quarter of 2015 to the first quarter of 2021. Despite this, the value of a home in Dubai dropped by 1.4% during the second quarter of 2022.
Residential sales and rent price indices in UAE (Dubai and Abu Dhabi) 2022
• Abu Dhabi Residential Property Sales Price Index decreased by 0.04 points, from 80.54 to 80.50, which represents a decrease of 0.06% in October 2022. Prices increased 2.70% yo-y.
• Dubai Residential Property Sales Price Index increased by 1.16 points, from 89.82 to 90.98, which represents an increase of 1.30% in October 2022. Prices also increased 9.16% yo-y.
- Abu Dhabi Residential Property Rent Price Index increased by 0.39 points, from 70.12 to 70.51, which represents an increase of 0.55% in October 2022. Prices decreased 0.81% y-o-y.
- Dubai Residential Property Rent Price Index increased by 1.78 points, from 88.79 to 90.57, which represents an increase of 2.00% in October 2022. Prices also increased 27.30% y-o-y.
- Abu Dhabi Residential Property Sales Price Index for apartments decreased by 0.08 points, from 78.29 to 78.21 , which represents a decrease of 0.10% in October 2022. Prices increased 2.60% y-o-y.
- Dubai Residential Property Sales Price Index for apartments increased by 1.24 points, from 88.14 to 89.38, which represents an increase of 1.41% in October 2022. Prices also increased 8.53% y-o-y.
- Abu Dhabi Residential Property Rent Price Index for apartments increased by 0.34 points, from 68.88 to 69.22, which represents an increase of 0.49% in October 2022. Prices decreased 0.87% y-o-y.
- Dubai Residential Property Rent Price Index for apartments increased by 1.77 points, from 87.77 to 89.54, which represents an increase of 2.02% in October 2022. Prices also increased 27.52% y-o-y.
- Abu Dhabi Residential Property Sales Price Index for villas increased by 0.16 points, from 89.00 to 89.16, which represents an increase of 0.18% in October 2022. Prices also increased 3.12% y-o-y.
- Dubai Residential Property Sales Price Index for villas increased by 0.67 points, from 102.88 to 103.55, which represents an increase of 0.65% in October 2022. Prices also increased 12.95% y-o-y.
- Abu Dhabi Residential Property Rent Price Index for villas increased by 0.66 points, from 75.43 to 76.09, which represents an increase of 0.89% in October 2022. Prices decreased 0.52% y-o-y.
- Dubai Residential Property Rent Price Index for villas increased by 1.84 points, from 99.53 to 101.37 which represents an increase of 1.85% in October 2022. Prices also increased 25.67% y-o-y.
Positive forecast for the real estate market in Dubai
According to the research published by S&P Global Ratings, both prices and rentals for real estate in Dubai are anticipated to increase significantly over the course of this year as a direct result of the emirate’s robust economy. The optimistic outlook held by investors in the GCC region is given a boost by the current high prices of oil.
The real estate market in Dubai has consistently ranked among the most unpredictable in the world. From the third quarter of 2008 to the third quarter of 2011, property prices in Dubai fell by 53 percent, making it one of the biggest housing crashes in the world. The housing market began to revive by the end of 2011, with prices increasing by a cumulative 67% until the fourth quarter of 2014. Since then, the housing market has been in a state of depression. The real estate market did not begin to show signs of significant improvement until the second part of the year 2021.
Good yields on rental properties may be found in Dubai, coming in at 5.19%.
Apartments in Dubai are quite pricey, averaging roughly $5,918 per square metre.
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The most recent news. Even though the economy of the UAE rose by 2.3% in 2021 compared to the previous year, this growth was not sufficient to fully balance the 6.1% decline that was recorded in 2020. The recent rise in oil prices and a gradual recovery in tourist arrivals were the primary factors that contributed to the small growth that was seen.
According to the Central Bank of the UAE, the economy is expected to grow by 4.2% this year in spite of significant increases in oil prices and increasing oil production. In addition, the high vaccine rollout and less restrictions will likely contribute to this growth. It is anticipated that growth in non-oil real GDP will come in at 3.9%, while growth in oil real GDP will come in at 5%.
Off-plan property demand remains strong in Dubai
According to Property Finder, the volume of off-plan property sales transactions in Dubai increased by 74% in May 2021 compared to the same month in the previous year. However, even before the epidemic, there was already a significant demand for pre-construction homes and apartments.
According to Property Finder, “over the years, investors have increasingly chosen to ‘flip’ their properties and participate in secondary off-plan sales where they sell their unit while it is still under construction.” “Over the years, investors have increasingly chosen to ‘flip’ their properties and participate in secondary off-plan sales.”
Prices of pre-construction homes and apartments are also going up. According to Sacchetto, “when looking at total values alone, the average off-plan value has climbed by 6.59 per cent… when compared to May 2019.”
As a result of the city’s improving economic conditions, the implementation of new government regulations, such as long-term residency visas for investors and professionals, and greater buyer protection, off-plan properties account for approximately 38% of all sales transactions in Dubai.
Additionally, Abu Dhabi has increased the safeguards in place to protect off-plan purchasers. Its most current real estate law (No. (3) of 2015) designated Abu Dhabi’s Department of Municipal Affairs (DMA) as the real estate regulator, with the same responsibilities as RERA in Dubai. The following is a list of the reforms, as detailed by The National:
- A centralised database or registry maintained by the government for all real estate development projects in Abu Dhabi, including pre-construction sales.
- It is strictly prohibited for developers to charge investors registration fees and they are only permitted to collect administrative costs that have been pre-approved by the DMA.
- The formation of owners’ organisations is governed by a set of rules, and developers are only permitted to sell off-plan apartments if they also own a real estate right over the land on which the project will be built. In addition to this, homebuyers are required to sign a “disclosure statement,” which provides information about the development.
- Escrow accounts must be established by the developers before they may begin selling “off-plan” units.
- Off-plan buyers have the option to back out of their purchase in the event of “substantial prejudice.”
- The DMA will levy fines against developers if the completion of their projects is delayed by more than six months. The new rule permits the termination of projects or the selection of a different developer in the event that there is a considerable delay in their completion.
- A responsibility period of 10 years for builders and developers in the event of structural building problems.
Better terms for expats to buy property
2019 saw the beginning of a brand new process for granting long-term residency visas to foreign investors and professionals working in the country. It removes the requirement of having a national sponsor in order for foreign nationals to be able to work, study, and live in the country. They can also have complete ownership of their company if they so choose. These visas will be valid for either five or ten years and will be automatically renewed once they expire.
Qualifications for obtaining a visa valid for 10 years:
- Investors that have public investments totaling a minimum of 10 million UAE Dirhams (2.72 million USD).
- Individuals with specialised skills, such as doctors, scientists, specialists, and inventors, in addition to imaginative people working in the fields of culture and art are examples of those who fall into this category.
- Outstanding students
Possibility of obtaining a visa valid for five years:
Potential buyers of an investment property in the United Arab Emirates that has a gross value of at least AED 5 million (1.36 million USD). The money that is invested in real estate cannot be taken out as a loan, and the investor must keep the property for at least three years after making the investment.
Entrepreneurs that already have a project in the works and have a minimum capital investment of AED 500,000 (US$136,000)
A brand new residency visa service that is available 24 hours a day, seven days a week was introduced in June 2021. This service gave consumers the ability to engage with a service staff at any time and learn the status of their transactions.
According to Major General Mohammed Ahmed Al Marri, head of the General Directorate of Residency and Foreign Affairs in the United Arab Emirates, “We in the United Arab Emirates in general, and Dubai in particular, seek to be at the forefront and aim to achieve customers’ requirements through services that distinguish Dubai from the rest of the world.” “We in the United Arab Emirates in general, and Dubai in particular, seek to be at the forefront and aim to achieve customers’ requirements through services that distinguish Dubai from the rest of the (GDRFA).