The firm pointed out the city maintained its standing as a safe and appealing destination for visitors and residents
According to Asteco’s Q2 2022 UAE Real Estate Report, the country’s real estate market remained strong during Q2, despite global headwinds and rising inflation concerns. The firm stated that global geopolitical tensions raised the position of the country as a safe destination to visit, live, work, invest in, and study.
The report said the increased demand for property can be tracked to pro-active government reforms such as the introduction of the Golden Visa, and the transition toward a digital economy.
Looking at the Dubai market, the firm said the first half of 2022 saw several “successful and notable project launches” that are the result of renewed optimism in the real estate market, which was initially bolstered by a strong secondary market. Developers are also eager to reinvest their profits in new project launches to capitalise on the current market conditions, the report said.
Apartment supply increased significantly from 6,000 units in Q1 2022 to 7,000 in the second quarter, and new villa handovers more than doubled to 520 completed properties. The majority of deliveries were concentrated in new developments such as Damac Hills, Dubai Hills Estate, Wasl Gate, and Port De La Mer. Another 25,000 residential units are scheduled to be completed by the end of the year, Asteco explained.
The firm added that rental rate growth in Dubai continued with similar momentum as last year; the average quarterly increases reached 4% for apartments, 6% for villas and 3% for offices, whilst annual growth stood at 15%, 23% and 13%. Demand for larger unit types, particularly villas and townhouses with adequate usable outdoor areas such as balconies and gardens, and a strong community offering remained the focus for residents, thereby driving rental and occupancy rates. Asteco said that it expects rental rates to remain elevated in the second half of the year, however, rental growth is expected to slow eventually.
Commenting on Dubai’s positioning, the real estate firm pointed out the city maintained its standing as a safe and appealing destination for visitors and residents, despite ongoing geopolitical dynamics, global uncertainty, and rising commodity and energy prices. Whilst many international markets are still recovering from past/recurring COVID-related lockdowns and restrictions, Dubai’s economy has made great strides, the report said.
In July, Madhav Dhar, Co-Founder and COO of ZāZEN Properties said that people around the world have realised that if and when a new pandemic hits, or if there is economic or political turmoil, Dubai is the best city to be in.
The economic rebound, bolstered by higher oil prices and the revival in tourism and trade, were attributed to “exceptional transaction figures during the first half of the year”, particularly with regards to off-plan properties. There has also been a marked increase in high-end/luxury residential unit sales, the firm observed.
Asteco said it expects strong inward investment to continue following several business reforms and government initiatives, such as the Golden Visa, and the transition toward a digital-driven economy. It highlighted that the UAE Cabinet updated the long-term visa regulations in April 2022, stating that a Golden Visa (10 years) can be obtained when purchasing a property for $545mn.
In addition, the company said that in June 2023, the UAE will introduce a 9% corporate tax on domestic and foreign firms, which is expected to provide a greater scope for the government to direct funds to priority sectors to achieve its growth and diversification goals in the long run.
Additionally, in July, Trakhees said 32 Dubai projects were awarded green building certificates.