Trend Predictions of Dubai Property Market in 2022
COVID-19 pandemic has brought excellent changes to the economy and real estate market in UAE. In 2021, the country showcased a fast recovery in the real estate and economic sectors.
Investors looking forward to buying commercial and residential properties in Dubai are curious to know what’s in store for the city’s real estate market in 2022, and which type of property is most in demand.
This article will review the current trends in the real estate market, the current costs for residential units, and the future development of this sector in 2022.
How the Dubai Real Estate Market Will Evolve in 2022
Property costs in the city of Dubai are predicted to increase in 2022 because of the fast vaccination program and supportive government economic reforms. The vaccination program has quickened recovery from the COVID-19 pandemic. Economic initiatives and measures in the UAE include a residency visa for remote and retired workers.
UAE developers are ready to deliver 50,000 to 60,000 housing units this year, as unveiled by the Head of Real Estate Research at ValuStrat Consultancy. Promising Dubai developers, like Damac and Emaar have introduced distinct packages to gain further investors and clients.
The packages include flexible payment plans and Dubai Land Department registration fee waivers. These initiatives will boost the selling of properties from Damac and Emaar. It’s said that the developers will keep putting out incentives to attract buyers in 2022.
As per the experts, a massive share of the total Dubai sales will be derived from the off-plan real estate market. Furthermore, prominent waterside homes will arouse great interest in tenants and investors. A main reason for this is the introduction of a freelance visa that was launched September 2021.
This visa enables people to reside in the UAE and be freelancers. Plus, freelancers in the UAE also have the chance to sponsor their family members, parents, children, and spouses.
Bloomberg predicted that the rise of real estate costs in the UAE will be at least 2.5% in 2022. Currently, many properties are under construction and will be opened soon. The trend of development of brand new properties in Dubai will continue to 2023.
Costs of Dubai Villas
Villas have become a famous category of property in the Emirate as of 2021. These villas come with secluded gardens, commodious living rooms, parking space, and swimming pools. The price for homes differs based on the address.
Costs in numerous sought-after villa-only communities in Dubai are:
- Mohammed Bin Rashid City: The starting price of homes is AED 2.5 million ($680,000), while the maximum cost is AED 120 million ($33 million).
- Palm Jumeirah: The starting price of homes is AED 6 million ($1.6 million), while the maximum cost is AED 180 million ($49 million).
- Arabian Ranches 2: The starting price of homes is AED 1.7 million ($463,000), while the maximum cost is AED 8 million ($2 million).
- Dubai Hills Estate: The starting price of homes is AED 2.3 million ($626,000), whereas the maximum cost is AED 150 million ($41 million).
- Al Furjan: The starting price of homes is AED 1.6 million ($436,000), whereas the maximum cost is AED 14.5 million ($4 million).
- Tilal Al Ghaf: The starting price of homes is AED 1.6 million ($436,000), whereas the maximum cost is AED 20 million ($5.5 million).
- Damac Hills 2: The starting price of homes is AED 549,000 ($149,000), whereas the maximum cost is AED 9.9 million ($2.7 million).
The surging demand for ready villas in Dubai in the time after the global pandemic is primarily due to everyone’s desire to isolate from the society in order to prioritize their health. Freedom of movement and commodiousness are other reasons for the demand for townhouses and villas in the city.
The significant increase in villa costs in Dubai was in May 2021. As per the Property Monitor data, the upward change varies from 0.86% and 5.65%.
Land Plot Costs
Lots of communities in Dubai provide land plots for sale. Some of these are Jumeirah, Dubai Hills Estate, Naad Al Sheba, Al Furjan, Jebel Ali, Mohammed Bin Rashid City, Jumeirah Village Circle, and a lot more.
The most affordable residential plots are available in Damac Hills 2 district, and the starting price here to buy a land plot in an area of 2,700 square feet is AED 390,000 ($106,000). Jebel Ali also showcases inexpensive land plots with a minimum cost of AED 836,000 ($228,000) yielding 9,842 square feet.
As for expensive land plots for sale, following districts are available:
- Palm Jumeirah: AED 339 million ($108 million) for a mixed-use land having an area of 309,171 square feet.
- Sheikh Zayed Road: AED 400 million ($109 million) for a land plot giving 80,450 square feet.
- Business Bay: AED 231 million ($63 million) for a mixed-use land plot giving 125,476 square feet.
Costs For Commercial Properties in Dubai
Commercial properties are extremely sought-after among investors due to a pleasant tax climate and favorable conditions for businesses in the country. For instance, expats can kickstart a company in Dubai with complete ownership. Another perk of doing business here is that the taxes are minimal.
There are no personal taxes on inheritance and personal income. Furthermore, most UAE firms are not forced to pay corporate tax. Only a limited variety of businesses have to pay this tax, such as foreign bank branches and foreign enterprises engaged with gas and oil production.
The city of Dubai showcases a mix of commercial properties, like warehouses, offices, showrooms, retail stores, and land for commercial purpose. The most striking communities for buying commercial real estate are Downtown Dubai, Business Bay, Dubai Industrial Park, Jumeirah Lake Towers, Al Quoz, Sheikh Zayed Road, and more.
Purchasing and further leasing commercial real estate to businesses is an effective way to invest.
The estimated ROI for commercial property in the city varies from 4% to 9%. Communities like Jumeirah Lake Towers, Business Bay, Barsha Heights, and Downtown Dubai offer the biggest number of offices for purchase. The minimum cost for buying an office having an area of 1,893 square feet in Business Bay is AED 3.3 million ($900,000).
Investors can purchase warehouses in areas like Al Quoz, Jebel Ali, Dubai Industrial Park, Dubai Investment Park, and more. The minimum selling cost of a warehouse having an area of 10,782 square feet in Dubai Investment Park is AED 1.8 million ($490k).
Famous communities for buying a retail space are Dubai Marina, Jumeirah Lake Towers, Meydan Racecourse, Business Bay, and DIFC. The minimum cost of a retail space having an area of 737 square feet in Jumeirah Lake Towers is AED 737k ($200k).