Kensington Finest Properties International, a global real estate broker company, has issued a report on the property market’s performance in 2021 and revealed trends that are set to shape the sector in 2022 in Dubai.
Aiming to help real estate investors, buyers, and sellers objectively assess the current and future market conditions, the report has been developed using independent research and empirical data collected from property portals and institutions including Fam Properties, Property Monitor, and Dubai Land Department.
In the report, Kensington has provided an in-depth insight on critical factors that are set to influence the sector including prices, supply and demand predictions, sales figures, and construction activity.
Some of the key insights shared by the real estate broker include:
Overview of Performance in 2021:
2021 was a year of recovery and growth for Dubai’s property market reporting 61,300 successful property sales. The report signals an increase in property prices in Dubai, which is now valued at AED 968/sq foot. Having reached its peak in 2014, the years that followed witnessed a steep decline in prices by 20-30% attributed, firstly, by an oversupply of construction projects then exacerbated by an accelerated drop during the pandemic in 2020.
Indicating the onset of a favorable market, the property industry has recorded an upward trend in prices from November 2020 to October 2021. Aided by new development projects, and concurrent sale of construction projects, there has been an 18% increase in prices since November 2020.
Furthermore, the number of properties sold in the past year surpassed the highest record set in 2014 by 9.7%, logging-in a 76% increase compared to the 34,900 units sold in 2020. Meanwhile, in terms of market value, 2021(AED 150.8 billion) witnessed a 109% increase from the preceding year’s value of AED 72 billion. As for localities, areas across Dubai Marina zones were the most sought-after neighborhoods; while, Business Bay, JVC, Al Thanyah 5th, and Dubai Hills Estate ranked highest in terms of sales figures.
Price Trends for Residential Properties:
Apartments: In 2021, Dubai Marina proved to be one of the most attractive zones for investors. With prices ranging from AED 600,000 to 8 million, the average apartment price of a square foot in this zone was AED 1234. Business Bay had a wider range of apartments with prices ranging from AED 299,888 to 12 million and a square foot average price of AED 1334. Downtown Dubai had apartments ranging from AED 679,200 to almost 3 million and an average square foot price of AED 1543. JVC had the lowest median price for furnished 2 BR apartments with AED 945,816 compared to Dubai Marina, Business Bay, and Downtown Dubai with AED 1.89, 1.95, and 2.29 million respectively.
Villas & Townhouses: Palm Jumeirah Fronds Garden topped the region in terms of villa prices with average sales price of AED 16.3 million followed by Jumeirah Islands and Jumeirah Golf Estates Villas with average sales prices 7.6 million and 6.2 million respectively. Emirates Living Villas, MBR City TH, Jumeirah Park, Science Park, The Villa and Damac Hills Villas are a few others that made it to the top 10 list of villas and townhouses with average sales prices in Dubai.
Rents and Yields:
The yields that can be generated from leasing Dubai property seem to have fallen slightly. It can be assumed that sales prices are currently rising faster than rental rates. In addition, rents are falling, in areas where there is a surplus of available apartments. Palm Jumeirah tops the lists of both apartments and villas/townhouses with the highest average annual rent of AED 648,238 and 165,268 respectively. Whereas International City had the lowest average rent with AED 22,614 annually.
Prospects:
UAE’s favorable regulatory landscapes and tax policies will continue to attract international investors.
Rental prices could remain under pressure especially in communities where the supply is still high, however sales prices are expected to remain on an upward trajectory throughout 2022.
Link to the full comprehensive report: https://www.kensington-international.com/dubai/dubai-market-report-2021-2022/
