Dubai housing market posted double-digit price growth
Dubai housing market posted double-digit price growth
With 2 years of growth and double-digit price increases in 2022, Dubai has weathered inflation and rising interest rates to maintain its position in the international real estate market, according to Property Monitor.
Despite declining by 1.33% per month in 2021, when annual value growth was just under 16%, the real estate data platform said in its study that overall house price growth was able to reach 11.05% in 2022, in an average of 0.92% per month.
2018 has been a successful year for the Dubai property market, as evidenced by a 1.17% jump in value in December. According to the Property Monitor's Dynamic Price Index (DPI), property prices are currently at AED 1,089 per square foot, the highest since late 2013 during the last market surge and early 2018 during the long pre-pandemic recession cycle.
In December, 9,131 sales were registered, which is 10.4% less than the total number of sales transactions. However, the month's number exceeded expectations, making it the best-performing December on record, nearly doubling the previous Decembers since 2014. With 86,849 sales in 2022, the residential sales level was able to reach a new record, beating the previous record of 80,831 sales in 2009.
The ValuStrat report claims that due to the increased demand for quality real estate, in 2023, the cost of Dubai housing will increase by 7-10%. This year, the emirate's tourism industry market is expecting an increase in the number of visitors.
The upcoming COP28 conference, which will bring together 140 countries and more than 80,000 participants, will also benefit Dubai. The recently unveiled UAE Tourism Strategy 2031 is expected to ramp up investment in tourism across a range of related industries such as travel, aviation and hospitality.
According to a survey conducted by DXBinteract.com, in 2022, Dubai real estate sales increased by 76% compared to 2021, with a total value of AED 265 billion. Sales of properties in progress increased by 100% in 2022, with a total of more than 52,000 transactions worth more than AED 124 billion.
Developers have shown confidence in 2022 with a record 53,000 properties on the market, valued at more than AED 155 billion. Gross rental yields continued to rise, with apartment yields at just over 7%, according to the Property Monitor report. This has made capital and rental returns an insurmountable hurdle for many investors, while mortgage lending volumes have remained strong, helped by an increase in investor portfolio volumes.
According to analyst reports, if the market manages to maintain the record pace of 2022, we could see more than 110,000 transactions in the new year. However, Property Monitor data predicts this is unlikely. Some investors will inevitably leave the market, then the number of transactions will inevitably decrease during the year.
