BrazilThe residential property market of Abu Dhabi and Dubai
Dubai-headquartered international consultancy ValuStrat has released its latest outlook on the residential property markets of Abu Dhabi and Dubai, shedding light on demand and supply of homes and average rents. A round-up of the main findings.
In Abu Dhabi, one of the UAE’s seven emirates, the stock of residential property currently stands at an estimated 241,000. That stock is predicted to grow by around 15,000 residential homes by the end of 2022, the majority of which will be apartments (as opposed to more luxurious villas).
In particular Al Reem Island and Al Raha Beach are popular areas for new developments. Notable expected deliveries this year include Maryah Plaza Al Maryah Island (1,450 units), Oasis Residence Masdar City (600 units), Water’s Edge Yas Island (549 units), and Yas Acres Phase 3 (923 units).
In 2020, despite the Covid-19 crisis, the number of transactions of residential homes in Abu Dhabi jumped 28% when compared to 2019, with 3,427 units sold for a total transaction value of AED 5 billion. Across the board, apartments become cheaper, while the price of villas increased, reaching an average asking price of AED 9,691 per square metre.
In the renting landscape, the average rental price of residential homes fell 2.8% when compared to the previous year, and by 6.3% in Abu Dhabi City.
Meanwhile, in Dubai, the largest UAE emirate with 3.4 million inhabitants (Abu Dhabi has around 2.1 million), the total number of homes currently stands at 686,000 units. Growth in residential homes had never been as high as in 2020, with a total of 36,015 units added to the stock, of which 27,435 were apartments and 8,580 were villas/townhouses.
Notable completed projects were Harbour Views (764 units), Wasl1 Park Gate Residences (746 units), Noor Townhouses (745 units) and Maple 3 Dubai Hills Estate (546 units).
This year, estimated upcoming supply is forecasted by ValuStrat to hit 46,316 apartments and 10,563 villas/townhouses, with more than fifty percent of the new build properties to be located in Dubailand, Jumeirah Village Circle, Downtown Dubai, and Dubai Creek Harbour.
Dubai’s home sale market has rebounded strongly from the crisis, with the first quarter of 2021 seeing the highest number of transactions since 2010. Meanwhile, price have recovered / grown, up 17.4% for ready home sales and 8.9% for off-plan sales when compared to the end of 2020.
The median transacted price for ready apartments is currently around AED 9,171 per square metre, while it is AED 9,580 per square metre for ready villas.
The home rental market however has proven less resilient – in 2020, overall residential asking rents fell 11%. The market is expected to rebound this year, but with residential occupancy in Dubai estimated at 80%, the recovery will be slow. Villa’s are an exception; the growth in price of these more luxury units is forecasted to outpace that of apartments and other homes.
With regional offices in the UAE, Saudi Arabia, and Qatar, ValuStrat is one of the leading consulting firms in the Middle East to the real estate and hospitality industries. The consultancy also serves clients across a range of other sectors.
