Dubai's real estate market shows no signs of slowing down despite the challenges posed by global tensions and inflation. The market witnessed higher activity levels on a quarterly and annual basis. Transaction volume increased by 9 percent QOQ and 44 percent year on year in Q2 2022.
Since the end of COVID restrictions, the average transactional price per square foot has been steadily increasing, and this quarter was no exception. The average transactional price per square foot increased by 7% from quarter to quarter, the highest quarterly increase since a year, and by 22% compared to the same quarter last year, reaching 1,391 AED/sq.ft.
The mortgage transactions remained constant, despite recent interest rate hikes announced by the central bank of the UAE. Existing investors and new property purchasers rushed to secure financing during the quarter at the present rates, with the majority preferring a fixed rate structure to prevent the future anticipated rate hikes that would be imposed to curb rising global inflation.
As a result of the Federal Reserve's plans to rapidly raise interest rates, mortgage activity is likely to be hampered in the near future. The mortgage market will inevitably be influenced by these reforms, which are implemented to combat inflation. However, other positive factors such as foreign direct investment, a rising population, and government initiatives supporting long-term growth may help mitigate the negative impact of mortgage borrowing power and the US dollar's strength compared to other major currencies.
During the quarter, there was significant growth in the number of property sales that occurred in both the primary and secondary market segments.When compared to the same quarter in 2021, both sets of numbers have increased by a total of 50% and 40%, respectively.
The performance of the residential luxury property (AED 10 million and above) and ultra-luxury property (USD 10 million and above) segments is reflecting the increase in millionaire migration to the city.
The number of transactions above 10 AED million increased by 113 percent year over year, while the value of these transactions jumped by 141 percent. The ultra-luxury property segment grew by 28 percent annually and by 50 percent quarter over quarter.
In light of the global political and economic climate, we anticipate that Dubai will attract a greater number of UHNWIs, resulting in a robust performance of the luxury market sector through 2022 and beyond.
The quarter's highest value of transactions took place in Downtown Dubai. It is worth noting that 69 percent of these transactions were for off-plan and resale units under construction.The current prices in the downtown area and the fact that it is rapidly approaching maturity explain the high levels of activity.
Commercial office and retail transactions are up 7% annually and down 4% quarterly. However, transaction value is up 69% annually and 13% quarterly, indicating a higher value per transaction and a consumer preference for prime property.
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Q2 2022 Dubai Real Estate Market Report
With luxurious homes transacting for around $800 per square, Dubai is one of the prime residential markets to invest in the world. Dubai’s real estate market is growing exponentially without showing any sign of slowdown.
It won’t be wrong to say that it has become the talk of the town because of the innovations and rapid developments.
Known for its divine architecture and the world's tallest building, Dubai is a one-stop solution to invest in the property rental market and initiate a luxurious lifestyle.
Additionally, according to reports, the lavish residential market in Dubai will post strong double-digit price growth and lead global markets in 2023.
The price in prime residential areas, which encompasses the neighbourhoods of Palm Jumeirah, Emirates Hills, Dubai Marina and Jumeirah Bay Island, is set to experience a 13.5 per cent increase next year. It is the strongest price growth globally as cities like Paris, New York, and Singapore will only be able to achieve single-digit growth, according to Knight Frank's 2023 Prime Predictions.
Reports also highlighted that the property rental market in Dubai will remain in high demand and prices are likely to end the year around 50% higher than in 2021.
The value of Dubai's real estate market is fueled by its safe-haven status. There are many exceptionally diverse ranges of international ultra-high-net-worth individuals in search of luxury second homes, combined of course with the government’s world-leading response to the pandemic, which has propelled business confidence.
If you are investing in Dubai’s property, you can surely expect great returns on your investment. You can rent out your luxury villas in which you have invested good amounts of money in Dubai with ease. Consequently, you can maintain continuous revenue in terms of rent. Renting out properties is more beneficial if compared to other cities as the rental benefits are much higher if compared to other cities across the globe.
Additionally, you can sell the million-dollar homes you have bought for investment objectives in the future and grab a good profit as the real estate market of Dubai is expected to expand with every passing day. All in all, you do not have to worry about your investment if you have invested in your savings in Dubai’s property market as a good return on investment is guaranteed.
It won’t be wrong to say that Dubai today is the most luxurious and most preferred city by folks across the world. The aesthetic architecture, along with the tallest building in the world the Burj-ul-Khalifa, and other captivating skyscrapers surely is a delight for the eye. The great combination of natural beauty and human art has made Dubai the most favoured city by tourists. Investing in lavishing homes will never be a bad option with Dubai’s booming tourism as you can offer your property for commercial uses too.
Moreover, Dubai is a lavish geographical location as Dubai’s time zone benefits global companies as it serves as a middle point in the Eastern and Western time zone. While the location’s proximity has also made travelling easier and more convenient with Dubai’s airport one of the busiest airports in the world.
Dubai is a very different proposition as it is more regulated, diverse and showing signs of maturity. So, what are you waiting for? Start exploring the best and most luxurious properties and get the best deal today!