Connect with us


Abdullah Alajaji Explains Dubai’s Real Estate Trends



Abdullah Alajaji Explains Dubai's Real Estate Trends

How the emirate’s real estate market evolves in 2022 will depend on the trends that are detailed below. Dubai’s real estate market has attracted a lot of interest in 2022. A number of notable performances were seen in the emirate’s real estate market. Then, what factors are having an impact on the sector this year? Along with sharing his opinions on major trends, Abdullah Alajaji also discusses the micro. Interested? Keep reading!

Macro Trends

Dubai’s economy has grown tremendously in many different ways. Several initiatives and reforms have been implemented by the government in recent years, with the primary goal of attracting more foreign direct investment into the city. Here are some of them: 

  • The 10-year visa (also known as the “golden visa”) was introduced by the government with the goal of providing long-term residence for individuals and retaining talented people in the country. 
  • Furthermore, reforms relating to the ownership of companies in the emirate without the requirement of a local sponsor aided economic growth.
  • Additionally, the UAE’s decisive move to adopt a more international workweek from Monday to Friday helped advance the emirate’s position in terms of trade, transportation, and its status as a financial hub and tourist destination.

Furthermore, the UAE Central Bank predicted a GDP growth rate of 4.2% for 2022, which is twice the growth rate attained in 2021 of 2.1%. A new wealthy population moving permanently to Dubai is expected to cause population growth to reach record highs, which will speed up growth across all economic sectors.

Micro trends

The stellar performance of the Dubai real estate market in 2021 has caught the attention of property inWvestors from across the globe. Thanks to years of infrastructure development and population growth, the market has outperformed the majority of international real estate markets, beating Paris, London, New York, and Hong Kong, to name a few. Dubai actually held the third-place spot globally for the city with the highest residential capital growth in 2021, with a recorded 17% growth.  

  • The year 2021 marked the highest transaction value in the history of the industry, at Dhs300bn. This shows an increase of 72% from the previous year.

In terms of capital values, demand and supply dynamics were at work in 2021. Villas and townhomes and the ultra-high-end segment of the market both experienced double-digit growth year over year, making them the best-performing sub-sectors. 

Due to relatively low levels of supply, increased demand from wealthy people moving to Dubai, and residents upgrading to larger, more COVID-friendly living spaces, both sectors saw significant growth in 2021. 

  • Waterfront communities and branded/serviced residences in established locations are two other sub-sectors that experienced growth over the course of the year.

Finally, looking ahead to 2022 and beyond, the Dubai real estate market appears poised to keep growing, propelled by a consistent inflow of fresh capital and a relatively cautious release of new supply from government and semi-government developers. Real estate has served as the ideal hedge for investors amid rising inflation and interest rates. Given the emergence of new catalysts, Dubai’s environment is favorable for continued expansion.