Consistent with the increased transactions and values last year, 2022 is shaping up to be a great one for Dubai’s property sector. In its first quarter, the residential property market only kept moving forward with a marked uptick in sales transactions and values.
DLD figures showed the real estate market’s continued growth with an 81% increase in transactions quarter-on-quarter. Prices have also continued to increase, albeit at a slightly slower rate than in 2020, pushing the value of the property sold in Q1 to a record $11.7 billion, a 125% increase compared to the same period in 2021.
Richard Waind, Betterhomes’ Group Managing Director, said, “While the original recovery of demand seen at the start of this price cycle was driven by existing residents taking advantage of the value in the market, recent demand has largely been driven by the influx of new residents to Dubai. The population fell by 8% at the peak of the pandemic but has rebounded by over 18% to stand at 3.5million at the start of 2022.”
The report pins this remarkable growth primarily when it comes to townhouses and apartments, which both experienced significant growth over Q1 2022. Villas have continued to do extremely well, especially in the luxury segment, with unit sales for villa properties up by 56% and values up by 97% compared to the same quarter last year. Well-priced villas are being sold almost as quickly as they came on the market as buyers compete amid a limited supply.
Average rental prices picked up on the back of an already tight housing market. According to Betterhomes, while apartments, townhouses, and villas rentals rose to 33%, 25%, and 64%, they saw a cutback in the number of inquiries and active listings hitting the market.
Another interesting observation in the market is the rise in occupancy rates at Betterhomes. After the pandemic caused a significant drop in occupancy rates in 2020, the numbers have been steadily increasing in freehold areas, from 79% in Q1 2021 to 93% in Q1 2022.
“These new residents, many expats attracted by the pandemic response in Dubai, have specially placed pressure on mid and upper leasing markets where we have seen substantial price increases. Occupancy levels across freehold Dubai now stand well above pre-pandemic levels, although old parts of Dubai continue to lag behind and landlords in older, leasehold areas are increasingly needing to look to upgrade their properties or offer discounts, to attract new tenants.”, Richard Waind continues.