UAE real estate market shows robust growth in first quarter – News

Average villa rental prices increased by 2% in the first quarter of 2022, with some developments seeing increases of almost 10%. Average annual increases were 5%.



In the Abu Dhabi residential and office market, approximately 3,800 residential units were delivered in the first quarter of 2022, spread across different areas of Abu Dhabi including Al Raha Beach, Al Reem Island, Yas Island and Saadiyat Island and several other residential areas. — File photo

Published: Mon 23 May 2022, 20:24

Real estate market activity in Abu Dhabi and Dubai remained strong in the first three months of 2022 thanks to a series of government initiatives, economic growth and improving market sentiment, analysts said. of the market.

In the Abu Dhabi residential and office market, approximately 3,800 residential units were delivered in the first quarter of 2022, spread across different areas of Abu Dhabi including Al Raha Beach, Al Reem Island, Yas Island and Saadiyat Island and several other residential areas, according to property market experts. at Asteco, a leading property management company.

Many residential and mixed-use projects located in the investment areas are expected to start construction in 2022 and a large majority of Abu Dhabi developers are now planning to develop new residential and mixed-use projects in different areas of Abu Dhabi due to positive market sentiment, Asteco analysts said in a report.

Average villa rental prices increased by 2% in the first quarter of 2022, with some developments seeing increases of almost 10%. Average annual increases were 5%.

In Dubai, the supply of new apartments accelerated significantly in the first quarter of 2022 with the delivery of 6,250 units, compared to less than 4,000 in the previous quarter. However, the villa market has lagged with only 250 units completed and delivered.

The report also states that new supply for 2022 in Dubai is likely to be lower than previous estimates. Delivery is now expected to reach a total of 29,000 apartments and 3,250 villas by the end of the year, with several projects likely to be delayed and spill over into 2023.

“The new supply – current and future – is dispersed throughout Dubai with deliveries to established communities, such as Dubai Marina and Business Bay, as well as upcoming developments including Port De La Mer, MBR City, Dubai Hills Estate , Damac Hills 1 and 2. New project launches (off-plan, under construction and completed developments) continued to be well received by investors and end users,” the report said.

In Dubai, villas continued to be the main focus of demand, and the limited number of new deliveries translated into higher rental and occupancy rates. Annual rental growth in the villa market has been quite significant at 25%, while average rental rates for apartments have increased by 14%.

Office rental rates have also increased by an average of 4.0% over the past three months, although net effective rents may have been influenced by additional incentives. The annual changes amounted to 6.0%, Asteco said.

“The positive benefits of Expo 2020 will undoubtedly be felt across a wide range of industries for many years to come. The tangible benefits resulting from infrastructure upgrades and site repurposing (legacy) for start-up businesses are evident. However, perhaps the most important legacy will be in the new business partnerships created, increased tourism and refocusing Dubai towards the digital economy, not to mention the continued progress Dubai is making to facilitate this transition,” says The report.

District 2020 will retain over 2.8 million square feet of gross floor area of ​​Leed Gold and Platinum structures from Expo 2020 Dubai. These will gradually be transformed into residential, commercial and cultural districts, with a population of 145,000 at full capacity. In addition, 108 serviced lots for residential, hotel, commercial and mixed use will be available for sale at a later date. The total planned GFA for construction is 28 million.

Apartment rental rates in the Northern Emirates improved slightly with average increases of 2.0% compared to the first quarter of 2022 and 1.0% per annum.

Office rental rates in Sharjah, for the first time in nearly five years, recorded positive quarterly and annual growth of 3.0% on average. Nonetheless, landlords will continue to offer incentives in the form of rent reductions and flexible payment terms.

Commercial transaction activity in Sharjah, as well as Ajman, remained strong, particularly in the villa market. Sale prices for apartments in Sharjah have remained more or less unchanged over the last quarter and annual increases have averaged 8.0%.

The real estate market in Al Ain has remained relatively stable over the past six months with modest improvements in demand and activity across all sectors, Asteco said.

[email protected]

About Tammy N. McFarlane

Check Also

Project Market in UAE Hits $3.7 Billion in Q3; overtakes Saudi Arabia as construction sector rebounds – News

In the UAE, the construction sector once again accounted for the largest share of new …