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Residential property sales in the UAE continue to build a strong momentum, bolstered by stronger demand and increasing buyer activity. Meanwhile, buyers are turning to mortgage financing as they rush to lock in rates in an environment where interest rates are rising, JLL said in a new report.
“End-users using mortgage finance to purchase properties have been rushing to lock-in fixed rates in an environment where both interest rates and rents are rising quickly,” said Khawar Khan, Head of Research, Middle East, Africa and Turkey at JLL.
Residential sales transactions saw remarkable growth over the January-September 2022 period with both volume and values up more than 45% year-on-year, the report said citing data from the Dubai Pulse.
The strong buyer activity was reflected in prices, which were up 9% year-on-year in August.
"Price growth is also being fueled by investor demand. The latter category has been returning to the off-plan market in force, whilst sales in the secondary market have also picked up in view of the upward trajectory of yields."
Meanwhile, around 6,600 residential units were handed over in Dubai in the third quarter, raising the total stock to 672,000 units. In terms of upcoming supply, an additional 20,000 units are scheduled for completion in the emirate in the final quarter of 2022, with any delays to deliveries expected to largely be rolled over into next year’s figures.
In Abu Dhabi, demand remains strong for new developments located within investment zones – particularly for townhouses and villas. This has been demonstrated by the successful launch of recently delivered projects. Year-on-year, in September, residential prices in the capital increased by an average of 4% and rents grew by 2%.
In terms of supply, Abu Dhabi approximately 1,900 units were delivered in Q3, bringing the city’s total number of dwellings to roughly 278,000 units.
An additional 2,000 units are planned to be completed in the capital by year-end, mainly within master-planned communities, the report said.
(Writing by Brinda Darasha; editing by Seban Scaria)
