Residential property prices in Dubai are expected to continue to grow in 2022, supported by Expo 2020 as well as demand for premium units, according to real estate analysts.
Real estate volumes should stay at multi-year highs, according to Arqaam Capital. Real estate consultancy Knight Frank expects prices to jump between 4-6 percent. Meanwhile, brokerage firm Haus & Haus expects 18 months of buoyant market conditions, and Savills says prices will continue to rise, but at a more sustainable pace than in 2021.
In its December MENA real estate outlook report, Arqaam Capital said high real estate volumes are being spurred by working from home trends, as well as high net worth marginal buyers, visa reforms and attractive yields.
“Residential prices should remain supported by the Expo 2020 activity in Q1 22e and catch-up in apartment yields for upper-end units,” the report said.
“Still, oversupply remains an overhang on the mid-end market,” the report said.
Faisal Durrani, partner and head of Middle East research, Knight Frank, said 78,000 units are scheduled to be delivered in Dubai in 2022, which, if it remains on track would be the largest delivery of units since 2009. However, there is potential for up to 30 percent to be delayed or deferred, he said.
Patterns of demand for villas and high-end properties seen in 2021 will continue in 2022, he added, for example in Palm Jumeirah, where villa price increases of 20 percent were recorded in 2021.
“Overall, after increasing by over eight percent in 2021, prices across the Dubai as a whole are expected to rise by nearer 4-6 percent, while the luxury end of the market will see growth of closer to 10-15 percent,” he said
There is a shortage of ultra-prime properties in the Emirate, Durrani added, with price increases of 23 percent seen for Burj Khalifa apartments in 2021.
Such 'frenetic' price increases may not be seen in 2022, said Swapnil Pillai, associate director, research at Savills Middle East, as while the most popular communities have seen the largest growth in 2021, others will play catch up this year.
"Overall, we are still about 20 percent away from the market peak of 2014. The recovery is certainly patchy with some areas recovering faster than others," he said, adding that some communities had already exceeded the peak.
"Whether or not we breach previous highs and by how much and in how long remains to be seen, but there is certainly some headroom for price appreciation," he concluded.
Arqaam’s analysis of Dubai Financial Market-listed Emaar Development (EMAARDEV) said that the company could sell up to 6,000 units per annum over the next 20 years, up by 20 percent on its annual average of 5,000.
“Momentum will continue in FY 22e as EMAARDEV targets 7k unit launches (2x FY 21e launches), although unlikely to beat FY 21e sales as most of the premium inventory was offloaded in FY 21e,” the report said.
James Perry, managing director of Haus & Haus, said he was expecting steady price growth throughout 2022. There is a strong demand for prime off-plan projects and only limited stocks are available in villa communities, he said.
Efficient COVID-19 management and Dubai’s attractiveness as a location for digital nomads are being cited as reasons for market buoyancy.
“High net worth clients continue to see Dubai as a safe haven, reinforcing the luxury sector and interest is high and constant from international investors,” Perry said.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
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