Market OverviewThe UAE residential real estate market is poised to register a CAGR of more than 8% during the forecast period, 2022-2027. The residential real estate market came to a halt as a result of the COVID-19 pandemic, as the government implemented lockdowns and citizens were forced to stay at home. Nonetheless, UAE residential property prices are set to continue rising in 2022, driven by supportive economic reforms and an accelerated vaccination program that has helped to hasten a rebound from the coronavirus-induced slowdown, according to experts. The UAE residential property market, which softened due to a three-year oil price slump that began in 2014 over oversupply concerns and the ensuing pandemic, has turned a page and is recovering as people move to larger homes with outdoor amenities amid a surge in remote working and online learning. In addition, economic support measures and government initiatives, such as residency permits for those who have retired and remote workers, in addition to the expansion of the 10-year golden visa program, have also helped to improve market sentiment. Following the pandemic, there was an immediate decrease in demand for retail office spaces, as well as residential real estate. However, moving into the following years, there has been a strong reversal of this trend. In recent years, the UAE government has opened up the real estate market for expats to a larger extent, allowing for more investments. The concept of both a five-year and a ten-year residency visa has been introduced, which can be acquired through real estate investments.
Scope of the ReportThe UAE residential real estate market report provides insights with an overview of the economy and the market, the impact of the COVID-19 pandemic on the market, real estate buying trends – socioeconomic and demographic insights, government initiatives, regulatory aspects for the residential real estate sector, insights into the size of real estate lending and loan to value trends, focus on technology innovation, startups and proptech in real estate, demand and for supply of residential real estate in the UAE and key cities, insights into rental yields in the real estate segment, insights into capital market penetration and REIT, insights into affordable housing support provided by the government and public-private partnerships, and market dynamics, among others. The report also presents in-depth impact of COVID-19 in the short term and long term. The report also covers qualitative and quantitative information on segments by type (apartments/condominiums and villas/landed houses) and key cities (Dubai, Abu Dhabi, and Sharjah). Additionally, the report also provides company profiles to understand the competitive landscape of the market.
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Key Market Trends
New Project Launches in Dubai are Expected to Boost the MarketThe realty sector in Dubai is back in the limelight, beating the COVID-19-induced uncertainties, and it is showing strong signs of sustained growth if one is to go by the statistics released by the Dubai Land Department (DLD). A survey involving property analysts forecasted Dubai house prices to rise by 3.0% in 2021 and 2.5% in 2022 compared to 1.1% and 2.8% three months ago. The survey predicts the Dubai residential property market to be on a steady course for a couple of years with a modest rise in prices. This indicates affordability on the one hand and sustainable growth on the other. Dubai now has a favorable climate for investment in properties, which gets further endorsed by leading real estate players who are planning new projects. Danube Group, for instance, is one among them.
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The Off-plan Housing Segment Performing Well in DubaiSales of off-plan property in Dubai registered strong growth in 2021. In August 2021, off-plan properties recorded $ 4.95 billion, or USD 1.3 billion, across 2,599 sales deals. This is the highest sales value to be recorded for sales of off-plan property in Dubai since December 2013, representing an eight-year high. It also represents the highest monthly off-plan transactions by number since November 2019. Arabian Ranches 3 and Villanova recorded the most off-plan villa and townhouse sales, the report said. A total of 187 units were sold in Arabian Ranches 3 and 157 in Villanova. Other areas of interest included Tilal al Ghaf with 79 units, Dubai South with 58 units, and Mohammed bin Rashid City with 16 units. Meanwhile, in terms of demand for off-plan property in Dubai during August, top areas for villas and townhouses included Dubai Hills Estate, Arabian Ranches, Palm Jumeriah, Damac Hills 2 and Mohammed bin Rashid City. Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay, and Jumeirah Village Circle were the most in demand for off-plan apartments. Further, the average transaction price for off-plan property in Dubai saw a year-on-year increase of 53%, climbing from about $ 1.2 million in August 2020 to $ 1.9 million in August 2021. Median prices for off-plan apartment sales stood at $ 1.1 million in August 2021, a growth of 48% from $ 745,500 in the same period last year. Median prices for off-plan villas and townhouses stood at about $ 1.8 million for the month this year, gaining 12% compared to 1.6 million last year.
Competitive LandscapeThe UAE residential real estate market has become increasingly competitive. Increasing spending on infrastructure, relaxed laws for foreign investors, new government initiatives to drive investments, and new project announcements are expected to bring an overall development in the real estate sector, which will further enhance the interest of more investors. Some of the major players in the UAE include Aldar Properties, Emaar Properties, Nakheel Properties, Deyaar Properties, and Damac Properties.
- In January 2022, the UAE-based conglomerate Alpha Dhabi Holding (ADH) acquired an additional 17% stake in Abu Dhabi’s largest property developer Aldar Properties, taking its stake to 29.8%. In this latest investment, Alpha Dhabi Holding completed the acquisition of Sublime 2, Sogno 2, and Sogno 3, which together own 17% of Aldar Properties.
- In November 2021, in the new maritime epicenter of Dubai city’s harbor, Emaar Beachfront is developing a new luxurious residential development spanning 10 million square feet. A private, gated island with superlative offerings is being created on this site in the style of a resort. Various amenities of a premium resort can be expected. A 1.5 km promenade features restaurants, bars and cafes, as well as recreational facilities like shopping and playgrounds. In addition, the beautiful Dubai Marina is right on the doorstep.
Table of Contents
- 1. Introduction
- 1.1 Study Assumptions
- 1.2 Scope of the Study
- 2. Research Methodology
- 3. Executive Summary
- 4. Market Insights
- 4.1 Current Economic Scenario and Consumer Sentiment
- 4.2 Residential Real Estate Buying Trends – Socioeconomic and Demographic Insights
- 4.3 Government Initiatives and Regulatory Aspects for Residential Real Estate Sector
- 4.4 Insights into Size of Real Estate Lending and Loan to Value Trends
- 4.5 Insights into Interest Rate Regime for General Economy and Real Estate Lending
- 4.6 Insights into Rental Yields in the Residential Real Estate Segment
- 4.7 Insights into Capital Market Penetration and REIT Presence in Residential Real Estate
- 4.8 Insights into Affordable Housing Support Provided by Government and Public-private Partnerships
- 4.9 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)
- 4.10 Market Dynamics
- 4.10.1 Drivers
- 4.10.2 Restraints
- 4.10.3 Opportunities
- 5. Market Segmentation
- 5.1 Type
- 5.1.1 Villas/Landed Houses
- 5.1.2 Condominiums/Apartments
- 5.2 Key Cities
- 5.2.1 Dubai
- 5.2.2 Abu Dhabi
- 5.2.3 Sharjah
- 5.1 Type
- 6. Competitve Landscape
- 6.1 Overview (Market Concentration and Major Players)
- 6.2 Company Profiles
- 6.2.1 Arada
- 6.2.2 Azizi Developments
- 6.2.3 Aldar Properties
- 6.2.4 Nakheel PJSC
- 6.2.5 Emaar
- 6.2.6 Damac Properties
- 6.2.7 Deyaar Properties
- 6.2.8 Union Properties
- 6.2.9 Manazel
- 6.2.10 Bloom Properties
- 6.2.11 Dubai Properties*
- 7. Future of the Market
- 8. Appendix
- 9. Disclaimer