The 2021 performance demonstrated investors’ higher interest in UAE real estate. Prices of apartments in the UAE in 2022 have increased substantially and keep growing. The demand for apartments in Dubai with one or more bedrooms is as high as for luxurious penthouses. Housing is purchased not only for relocation (as a permanent residence) but also for investment. The authorities enhanced this trend with successful anti-COVID policies, as well as incentives for foreign investors – as in changes in the basic regulations of issuing a residence permit, which has become even more readily available in the case of purchasing real estate.
Contents:
- Real estate market performance in recent years
- Changes in Dubai apartment prices
- Prospects of real estate market development
- Professional assistance
Real estate market performance in recent years
According to the consulting firm ValuStart, the cumulative revenue from real estate transactions in Dubai reached $41.1 billion in 2021, which is the highest since 2009 and a 110% growth compared to 2020. The number of transactions made in 2021 was the highest on record since 2013. Prices in the elite housing segment spiked most dramatically – by 35% on average, compared to the previous year.
All indicators show that the number of people interested in how much Dubai apartments cost is increasing. An active consumer demand boosts the prices.
Changes in Dubai apartment prices
By the end of Q1 2022, the trend of Dubai apartment prices after the crisis was as follows:
- The demand for real estate grew by 79% compared to the same period last year
- This growth reached 124% in monetary terms
The new homes market in the megalopolis is growing rapidly. Over Q1 of the current year, 8,600 transactions for new housing were registered, which is 124% higher than last year. Investors prefer off-plan property, as it becomes more expensive by the time residential projects are commissioned. This enables investors to see a significant return within a noticeably brief period by reselling their property.
According to the consulting firm CBRE, prices grew by 11.3% on average in Q1 2022. The average value of lower-end apartments is about $200,000. Elite apartments cost upwards of several million dollars. The peak value of housing, last recorded in 2014, has not yet been achieved, so prices of Dubai apartments in 2022 will keep increasing due to the actively developing economy and high investment interest from foreigners.
Prospects of real estate market development
According to a report by the Dubai Land Department (DLD), the value of a square meter of residential property in Dubai grew by 33.4% in January of the current year alone, reaching $428.8. The financial company Bloomberg believes that this trend will continue at least from 2022 – 2023. The highest growth is forecasted in the premium housing segment which experiences a shortage of supply.
Analysts from Knight Frank consulting firm emphasize that the Dubai real estate market has a high potential. And while the prices are still almost 30% lower than at the 2014 peak, the prospects of the real estate market in the UAE are high due to increasing prices. Real estate is invariably attractive as an investment. Housing is forecast to become 3% more expensive by the end of the current year, while the year 2023 may see a 2.5% growth.
Investors are interested in this market for several reasons:
- Generous tax policy. Real estate is tax-exempt, as is rental income
- Favorable conditions for conducting business
- High quality of life incentivizing people to relocate to this country and its largest megalopolis
Buying residences for subsequent reselling is another popular option. Changes in prices of apartments in the United Arab Emirates do not hinder the investors as the peak has not yet been achieved.
Promising districts to buy property in
The cost of apartments in Dubai depends on their location to a great extent. For instance, prices of housing on Palm Jumeirah’s man-made archipelago have grown by more than 75% since the start of the pandemic. Other communities offer comfortable living conditions at more affordable prices:
- Discovery Gardens – a community in Jebel Ali, an actively developing district. Here, the current prices of apartments in Dubai are just over $100,000
- International City – a community with a unique development mirroring architectural styles of 10 countries. This community has numerous amenities, and everything required for comfortable living, while two-bedroom apartments cost under $100,000
- Downtown Dubai – the megalopolis’ tourist hub. Housing in this district is a worthwhile investment and can yield a +7% return. Buying an apartment will cost more, but the expected return is certain
These are only a few of the viable options with quite an affordable cost of apartments in Dubai. There are more than 60 Free Zones in this emirate where foreign citizens are entitled to complete ownership of the real estate. In the other parts of Dubai, rent is the only option available to ex-pats.
Professional assistance
View listings from local real estate agencies and developers in real-time! Residential property in all high-demand locations of the megalopolis is available in our catalog. Find out the cost of apartments in Dubai today. Our professional team is happy to answer any questions about selecting and buying foreign property.
