Total Sales for Dubai Property Close in on Dh100 Billion
Much like initial forecasts across the globe, UAE property predictions for 2021 and beyond were uncertain, to say the least. However, total property sales in Dubai for the year are edging closer to the Dh100 billion mark.
Following several months of a successful Covid-19 vaccination drive and subsequent economic recovery, there is a growing sense of positivity throughout the property market. In August 2021, property transactions in Dubai surpassed Dh88 billion and outpaced the majority of forecasts for the entire year.
To begin with, forecasts for 2021 capped property price growth across Dubai at 1.1% and were expecting no more than 2.8% growth for 2022. A quicker economic recovery has now pushed these expectations, especially after seeing an 11.8% increase in prices across the Emirates so far this year.
Activity from end-users and first-time buyers are leading this rebound in the property market, as mortgage-backed deals increase and perspectives towards buying change. While residents who intend on staying in the country initially planned on renting in the long-term, they are now finding themselves buying a property or looking to purchase in the coming months.
Despite the growth in property prices we have seen this month, not all forecasts are as optimistic for the months ahead. Although property analysts from Reuters amended their predictions for 2021 in July, the growing positivity throughout both the property market and wider economy is yet to lead to a considerable jump in predictions for 2022.
Instead, the Reuters property price forecast for next year has dropped. While it was once anticipating 2.8% growth in property prices across Dubai, the amended prediction has now been capped at just 2.5%. This decrease follows further caution surrounding the future of the UAE property market.
Faisal Durrani, head of Middle East research at Knight Frank, says: “Prices overall are still about 36% down from their last peak in 2014, so relatively speaking we are still a long way off the previous peak.
“And the increases recently are definitely suggesting the market has started to bottom out in certain pockets. At the top end of the market we are probably seeing a quicker recovery than elsewhere. For some, like apartments, we are not expecting price rises as quick and as fast as has been the case for villas.”
The increases we have seen in property prices since the beginning of 2021 have been revolutionary for Dubai, after not seeing any house price growth in six years. With this in mind, it’s understandable that property professionals remain cautious about the future of the property market.
The absence of consistent price growth throughout Dubai, and the majority of the UAE, has long made the UK property market more appealing to overseas investors. For the best part of 10 years, UK house prices have been on an upward trajectory, which has only increased over the past 18 months.
Not only do these rising prices offer overseas investors the opportunity for bigger capital growth on their property investment in the long-term, but the resilience of the market as a whole provides more reassurance that the property will see substantial returns.