Q1 2022 Dubai Real Estate Market Update
When we compare Q1 2022 to Q4 2021, we saw a 15% increase in sales transactions volume and 18.5% increase in value which is a significant quarter-on-quarter growth.
Looking back to 2021 and how it was for Dubai real estate, we think of all the records broken for sales volumes, values and mortgages. With a total of 61,241 real estate sales transactions, it was the highest since 2013. Following on from a fantastic 2021, 2022 has not disappointed with a total of 20,640 sales transactions worth AED 55.67 billion as of March 31st. To break it down further, in the off-plan segment there were a total of 8,613 sales transactions worth AED 16.08 billion and 12,027 secondary transactions worth AED 39.58 billion in Q1.
When we look at Q1 monthly, we witnessed records broken every single month. January was the all time best January on record with 5,797 real estate sales transactions worth AED 16.69 billion. This also includes the off-plan segment, as off-plan volume increased by 183.05 percent and value increased by 307.88 percent compared to January 2021.
February followed suit with 6,357 sales transactions worth AED 16.28 billion making it the highest February ever recorded for both sales volume and value.
Rounding off the quarter, March took the market by storm as the highest month ever on record for sales value worth AED 22.72 billion surpassing the June 2009 record of AED 22.62 billion. March also was the second highest month ever on record in terms of sales transactions with 8,487 transactions.
When we break down the March numbers and compare to 2021, we saw a 85% increase in total sales transactions compared to March 2021 and a 112% increase in sales value. When we compare Q1 2022 to Q4 2021, we saw a 15% increase in sales transactions volume and 18.5% increase in value which is a significant quarter-on-quarter growth.
In Q1 2022, we continued to see off-plan sales increase quarter-on-quarter accounting for 42% of total sales transactions while the secondary market accounted for 58% of transactions. During the pandemic, many developers took a step back and really assessed the market to understand what type of projects to build which checked all of the boxes for investors and consumers alike. This is one of the factors that has made the off-plan market in demand again coupled with the fact that current supply is low in prime, popular areas and prices have increased in the secondary market.
Dubai Luxury Market Growth
We couldn’t talk about Q1 without talking about the luxury segment. There has been a significant increase in demand for high ticket properties since last year by high net worth individuals from other countries, including many European countries. With that said, the supply in this segment is scarce, to say the least, and has many agencies vying for what is left.
In Q1, we had 89 transactions over AED 30M in the luxury segment with Palm Jumeirah topping off the list as the highest demand area with 24 transactions. In fact, the most expensive villa transaction ever recorded occurred in March on Palm Jumeirah for AED 280M. The other notable high demand areas were Business Bay with 10 transactions, Dubai Hills and Dubai Marina each with nine transactions, Bvlgari/La Mer with six transactions and Burj Khalifa with four transactions.
Upcoming Supply
When we look at upcoming supply, according to various open data sources, we can expect a little over 35,000 units to be completed in 2022 with the majority being in the apartment segment. The top areas for new apartment supply this year are expected to be Downtown Dubai, Business Bay, Dubai Hills Estate, Dubai Creek Harbour and Jumeirah Village Circle. In the villa/townhouse segment, we are expecting to see a little over 5,000 units completed this year, with a majority in Arabian Ranches 3, Dubai South, Dubai Lifestyle City and Dubai Hills Estate.
As all the signs are pointing toward 2022 continuing on an upward trajectory when it comes to sales volume and price increase in prime, popular areas and in particular segments such as villa/townhouse and luxury. It will be interesting to see how each segment and area will take shape in 2022, as each has its own unique class of characteristics, demand, supply and trends. We also need to be conscious of the fact that interest rates will continue to rise this year, inflation is rising across the world and the supply chain issue has affected the cost of goods including construction supply and material.
Nevertheless, Dubai continues to thrive and has become the economic hub of the region attracting more businesses and foreign direct investment with its encouraging and innovative environment. This, coupled with the proactive measures put in place over the last few years by introducing various incentives, laws and legislation will be what sets it apart from the rest of mature cities and will be the driving factors to continue the city's growth.