S&P says the residential property market in Dubai will keep surging in terms of prices

The latest report by S&P Global Ratings states that the residential real estate market in Dubai is set to increase both in terms of sales and rentals, amidst the economic recovery. Subsequently this surge is expected to encourage developers to release new projects. At the same time, current geopolitical tensions are highly likely to promote Dubai as a haven and boost the demand for local properties.

In general, the UAE market has witnessed a revival from the pandemic , thanks to remote work visas, residency permits for retirees and the expansion of the 10-year Golden Visa scheme. S&P Ratings anticipates slower growth in mortgage deals, at about 20-25% of total sales, because of the interest rate rises. Nevertheless, this will be partially offset by attractive payment plans.

Moreover, on the back of a thriving market, real estate developers are expected to register an acceleration of revenue growth over the upcoming 4-5 years, which will be maintained by a moderate supply of new properties. It is worth noting there are a range of developers who recorded an astonishing surge in transactions, including Emaar Properties and Nakheel, after they commissioned multiple projects launched in 2016 and 2017.

According to EFG Hermes, the total transactional activity in terms of residential real estate grew by 34% annually to AED 15.5B (USD 4.2B), as 6,913 units were sold. Such high indicators were majorly fuelled by a 3-fold increase in the value of off-plan deals and a 107% surge in the sale of ready housing. As reported by CBRE, the areas that recorded the highest price increase in the apartment sector in February were the Green Community (3%), Jebel Ali (2.8%) and Jumeirah (2.7%). At the same time, in the villa segment, residences in Jumeirah Village Circle and Palm Jumeirah rose by 3% and 2.9% respectively. Overall, average capital values were up to 10.7% in the year to February, with average apartment prices growing by 9.1% and villa prices rising by 21%.