Since the start of the year, we have been predicting that 2022 could go down as a record year for Dubai real estate. Certainly, the performance in the first three months has shown this is very likely to be the case.
Already we have seen the sale of the most expensive villa in Dubai history for a staggering Dh280 million, smashing records from last year where a number of sales were above Dh100 million. As a company, we have sold the most expensive Nest villa in Al Barari as well as two prime waterfront plots for in excess of Dh250 million - and have some high-value sales in the pipeline that cannot be disclosed yet.
Earlier this week, we took a closer look at the sales data for prime and super prime real estate to formulate our Q1-2022 market report, which shows a very healthy view of the market overall. Taking a year-on-year view, we find that the number of transactions has increased by about 11.6 per cent from the same period in 2021, while prices have increased by an astonishing 16.3 per cent.
The rise is hardly surprising, as demand has been soundly outstripping supply over the past year and continues to do so. When we look at Emirates Hills and the Frond villas on the Palm, the shortage in inventory becomes quite evident. The most significant effect of this is the push towards apartment projects, particularly the higher profile ones that offer a resort lifestyle. They tend to offer a limited number of units, ensuring greater privacy for residents, which is always a huge plus.
Two noticeable trends seen over the past quarter are the increase in cash buyers for most communities, and the increase in offplan sales. Dubai’s offplan market registered 6,432 transactions, with the highest valued sale being almost Dh69 million. By contrast, 3,280 offplan sales were registered in the same period of 2021 with the highest value at Dh43 million.
Looking at the data more closely, we can see that 95 of transactions registered this year at above Dh10 million, whereas less than 25 transactions broke the mark in Q1-2021. This is quite a significant shift, and one that is above even pre-Covid levels (the same period in 2019 saw about 4,500 transactions with just over 30 above Dh10 million).
We are also seeing an increase in the number of cash buyers entering the market – in some cases, the percentage of cash vs. mortgage has flipped around completely from what it was last year. What caused this shift?
Closer to completion
These two points are quite closely linked and there a number of factors involved. For starters, several high-profile offplan projects are coming to fruition, including towers in Emaar Beachfront and resort projects such as One at Palm Jumeirah and Royal Atlantis. This is from a combination of investors who have a higher degree of confidence in a project that is almost ready, as well as prospective homeowners who are planning to shift to Dubai in a few months and would like to start their lives in a newly completed home.
Many of these buyers, particularly over the last month, have been from Europe in the wake of the current conflict. They are looking at attractive payment plans for new projects, which makes it easier to manage a cash transaction that can be divided up over time.
The Dubai real estate market looks incredibly strong for the remainder of 2022. As a company, we have seen digital traffic to our website increase 400 per cent year-on-year, with a larger volume of enquiries in the prime- and super-prime space. The new UAE visa announcements will only add to that as we head into the summer.
We are already dealing with several clients at the C-Suite level who have been considering the idea of Dubai as a city to lay down roots and settle with their families – now that becomes easier than ever. One of the new visa reforms makes it easier for offplan investors to get a residence visa, which makes it highly likely that the offplan market’s performance in Q2-22 and Q3-22 will exceed the first quarter.
I have said before that this will be a historic year for Dubai real estate - the market is already well on the way to making that happen.