#Report: Dubai Real Estate Market Q2 2022

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.

The Dubai property rental market has remained stable in Q2 2022, with modest increases in both rental prices and demand for rental properties.
Demand for rental properties in Dubai remains strong, with a particularly high demand for properties in popular neighborhoods such as Dubai Marina and Downtown Dubai. This is due to the abundance of job opportunities and amenities in these areas, as well as their proximity to key business districts.
There has also been a trend towards longer-term rentals in Dubai, with an increasing number of tenants opting for leases of two years or more. This is likely due to the relative stability and security that long-term rentals offer, as well as the increasing cost of living in the city.
Despite the stability of the rental market in Dubai, it is important for both landlords and tenants to be aware of market trends and negotiate rental agreements that are fair and reasonable. Landlords should aim to set rental prices that are competitive, while tenants should be prepared to pay a fair price for the property and location they desire.
Overall, the Dubai property rental market remains healthy and stable, with modest price increases and strong demand for rental properties in key areas of the city. With a range of properties available to suit all budgets and needs, Dubai remains a popular destination for both locals and expats looking for a place to call home.

Download Full Report:
Q2 2022 Dubai Real Estate Market Report


Source : Research Team