Record-breaking growth of Dubai’s real estate market in 2021 and forecasts of 2022

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The year 2021 was quite eventful for the Emirate of Dubai, with the opening of the grand world fair Expo 2020, the launch of major initiatives including federal Green and Freelance Visas and a successful vaccination drive. So it is not surprising that the real estate market has witnessed a tremendous boost in demand among both UAE-based and overseas buyers. According to the recent data by the DLD, Dubai recorded more than 57,500 property deals worth AED 142.5B (USD 36.86B) from January to mid-December, making 2021 the best year regarding total sales since 2014.

As shown in the ValuStrat Price Index, Palm Jumeirah and JBR were particularly popular among real estate buyers in 2021, with respective annual gains of 17.4% and 15.6%. It is worth noting that the first quarter of this year will see the opening of the iconic Atlantis The Royal Residences on Palm Jumeirah. Representing luxury living at its finest, the stunning 38-storey development brings the ultimate collection of bespoke 2-5 bedroom residences.

A few of the key highlights of this year include:

  • Historically low mortgage and interest rates.
  • Buyers and tenants switching to villas/townhouses instead of apartments due to more privacy and larger living and outdoor spaces.
  • Surge of villa rental prices by 15.5%.
  • Tremendous increase in demand for ultra-luxury properties, with 54 sold in the first 9 months of 2021.

In order to make the real estate market even more appealing to buyers, the UAE government announced several groundbreaking incentives in 2021. For instance, Dubai’s Department of Economy and Tourism (DET) launched a portal in December, in which timeshare operators can apply for permits. This website aims at making Dubai a leading destination for holiday-home ownership and encouraging tourists to visit the city for numerous and extended stays. Moreover, the UAE government issued the Electronic Transactions and Trust Services Law promulgated by Federal Decree-Law No. 46 of 2021, which makes a digital signature totally equal to a handwritten one in terms of legal authority. Thus, from Q1 2022, there will be no need for personal attendance to complete transactions in banks, courts and institutions, whether within or outside the country. This law includes an array of commercial and civil transactions, such as personal status, marriage and most importantly, real estate procedures, from purchasing to contract modification, just to name a few. Following this initiative, the master developers Aldar Properties and Majid Al Futtaim Communities have decided to collaborate in order to launch digital sales platforms when the E-Law comes into effect. These systems will be the first of its kind in the UAE, allowing real estate buyers to experience hassle-free and safe transactions, regardless of their location.

The year 2022 is expected to continue to witness a strong performance in the real estate market in Dubai, especially when the Expo 2020 site will turn into the innovative mixed-use community; District 2020. Moreover, according to the real estate consultancy Core, villa districts and the majority of upscale apartment locations will keep recovering throughout 2022. At the same time, affordable apartment areas with extensive existing stock will witness slower stabilization rates. As stated by ValuStrat, capital values of villas are set to increase further and they are likely to surpass the peak prices of 2014. And of course, with eased travel restrictions, Dubai will remain one of the leading destinations for international investors to invest in.

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