Dubai
Market Report 2021 / 2022
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INTRODUCTION
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s we enter 2022, KENSINGTON’s research team brings you up to date on trends in the Dubai property market. The country on the Persian Gulf has a population of around 3.4 million and is one of the seven emirates that make up the United Arab Emirates (UAE). The aim is to analyse trends in prices, supply and demand, sales figures, construction activity and rentals. The focus is mainly on freehold properties, which foreigners can
acquire full ownership over. Prices are quoted in UAE Dirham (AED) and euros. We would like to help poten tial investors, buyers and sellers of property in Dubai to objectively assess the current and future mar ket conditions. Our analyses are based on our own research and empirical data collected from property portals and institutions, in particular Fäm Properties, Property Monitor and the Dubai Land Department.
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IMPORTANCE OF THE DUBAI PROPERTY MARKET
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ubai is a hot spot that attracts investors, expatriates and tourists. With mega-projects, record-breaking buildings and exclusive residential complexes, the emirate has been the focus of the international property-buying community for at least 20 years. The construction of a gigantic island in the shape of a palm tree marked a new course in the early 2000s - The Palm Jumeirah was one of the first of these spectacular large-scale projects. The skyline, residential complexes and tourist attractions have been growing ever
since. Dubai is home to the world’s tallest building, the Burj Khalifa (828 m), and the airport has risen to become one of the most important aviation hubs. Dubai attracts visitors by offering luxury, entertainment and a modern lifestyle. It offers not only beaches on the Persian Gulf and the most exclusive hotels but also elegant shopping malls, souks, nightlife, marinas and polo, as well as promenades with restaurants and cafés. There are extraordinary things like winter sports (ice skating rink, indoor skiing), a deep diving facility and a huge
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aquarium. The Dubai Opera is the stage for numerous musicals, operas and other cultural events, and Dubai is frequently the venue for international events, such as the current Expo 2020, which - after postponements due to the pandemic - opened on 1 October 2021. Foreigners have been allowed to buy villas and apartments in Dubai since 2002. However, full ownership (freehold) is only possible in specific areas designated by the emirate. However, these include the most interesting development projects. Artificial canals, marinas, lagoons and golf courses
are creating prime locations. Dubai City, home to about 3 million people, is one of the most popular cities in the world to both live and visit. Besides the sunny climate, the security and dynamic economy attract many expats. Dubai residents do not have to pay income tax, and buying property is just one way to obtain a long-term resident visa. The so-called “five-year-property-investment” is particularly popular, with a required investment of AED 5 million (approx. €1.15 mil) in real estate. This option entitles a person to a 5-year resident visa.
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Transactions: Sales volume and distribution 2021 was a record year in Dubai’s property market. New highs were recorded in both the number and value of sales transactions, with some 61,300 property sales completed in 2021. By comparison, there were 34,900 sales in the pandemic year of 2020. The number of sales increased by about 76% and was still 9.7% more than in the previous record year of 2014. In total, the value of transactions in 2021 comprised around AED 150.6 billion (EUR 36.1 billion). In the previous year, the figure was AED 72 billion (EUR 17.3 billion) - still an increase of 109%. The best sales month was November 2021, followed by December and September. The local focal points were: Dubai Marina
zones. Business Bay, Jumeirah Village Circle (JVC), Al Thanyah 5th (Jumeirah Lake Towers, Jumeirah Park, Jumeirah Islands) and Dubai Hills Estates ranked ahead in terms of total sales number (see Table 1). Taking only villa sales into consideration, the Wadi Al Safa 5 zone is ahead of Dubai Hills Estates and Al Hebiah Fourth. For off-plan apartments (off-plan/before completion), MBC City (Al Merkadh) was amongst the most sought-after areas, along with Dubai Marina and Business Bay. For land purchases, Mudon-Damac Hills, Al Hebiah Fourth and Dubai Hills Estates recorded the highest numbers. Commercial properties were mainly acquired in Al Thanyah 5th and Business Bay.
7 Number Of Residential Property Sales/ Top Ten Zones. Numbers
Zones
Quantity
Change Year to year *
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Dubai (total)
60.869
+76 %
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Dubai Marina
6.130
+ 93 %
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Business Bay
5.152
+103 %
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Jumeirah Village Circle
3.717
+ 58 %
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Al Thanyah 5th
3.646
+159 %
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Dubai Hills Estates
3.232
+151 %
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Al Merkadh (MBR City)
3.026
+58 %
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Wadi Al Safa 5
2.944
+114 %
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Sports City
2.900
+73 %
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Downtown Dubai
2.606
+85 %
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Palm Jumeirah
2.019
+85 %
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Jebal Ali First
1.696
+119 %
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Al Warsan First
1.580
+37 %
Data from January to 28 December 2021, *Comparison with same period in 2020
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Price Trends For Residential Properties 2021 saw an increase in property prices in Dubai. According to available data through the end of November, the average price for a square foot (ft2) is now AED 968 (€2,494/m2). In Dubai, the property market reached its last peak in September 2014. The years 2014 to 2019 were characterised by large-scale construction and accompanying price reductions of 20 to 30%. With the pandemic, things went even further downhill in 2020 until the price curve finally moved upward again at the end of the year. From November 2020 to October 2021, Dubai’s property
became more expensive month after month (from AED 820 to AED 977/ft2 on average/month). It wasn’t until November 21 that there was a slight price decline from the previous month again (-1%). In comparison to November 2020, prices are up by as much as 18%. Prices are fuelled by new construction projects being sold off-plan as well as new development projects. Dubai offers many options for prospective buyers. It is worth taking a closer look at some of the most desirable areas.
APART MENTS
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Dubai Marina
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he Dubai Marina district is especially popular with buyers. The ambience is impressive with a futuristic flair created by the abundance of modern skyscrapers situated on the artificial canal, which is 3.5 km long and has access to the sea. There are piers, restaurants, cafes, fashion stores, promenades and a seaside setting with yachts and a clubhouse. You get city life right on the water. Dubai Marina is one of the largest areas where full ownership is possible for foreigners. Younger expats like to rent apartments here, which also attract investors. Prices are rising at an above-average rate. The average apartment price in Dubai Marina per square foot is now AED 1,234 (€3,182/m2). Apartment prices start at AED 600,000 (€144,000). The median price for finished two-bedroom apartments in November 2021 was AED 1,895,000 (€455,000). High-end properties fetch up to AED 8 mil (€1.92 mil). Year-on-year price change: +16.5%.
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Business Bay
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ocated in the heart of the city, Business Bay is a development area covering 436 hectares with commerce, business and luxury apartments. The plans envisage over 200 skyscrapers, with an urban lifestyle dominating the edge of Downtown Dubai. Living and working are to be intertwined. Many high-rises are equipped with a pool, spa and fitness club. Average apartment price: AED 1,334/ ft2 (€3,440/m2). Minimum price: AED 299,888 (€72,000), median price/2 BR/finished: AED 1,954,000 (€469,000), high-end properties: up to AED 12 mil (€2.88 mil). Year-on-year price change: -3.07 %.
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Downtown Dubai
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owntown Dubai is a mixed-use develop ment with reside ntial and commercial properties as well as many of the city’s major attractions, such as the Burj Khalifa, Dubai Mall, Aquarium, Souk Al Bahar, Dubai Fountain, the Opera and many restaurants and stores. Families like to live in the prestigious downtown area. It has a good supply of nurseries, schools, universities and clinics. Downtown Dubai borders Business Bay to the south and has a slightly higher price range: Average apartment price: AED 1,543/ ft2 (€3,978/m2). Minimum price: AED 679,200 (€163,000), median price/2 BR/finished: AED 2.295 mil (€551,000), high-end properties: up to AED 20 mil (€4.8 mil). Year-on-year price change: +6.24%.
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Jumeirah Village Circle (JVC)
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VC is a self-contained and family-friendly area with lots of greenery, set back from the coast between Emirates Hill and Sports City. The quiet community is well-suited for a healthy lifestyle. There are apartments, villas and plots available here: Average apartment price: 830 AED/ft2 (2,142 €/m2). Minimum price: AED 265,000 (€63,600), median price/2 BR/ finished: AED 945,816 (€227,000), high-end properties: up to AED 1.33 (€320,000). Year-on-year price change: -6.3%.
VILLAS & TOWN HOUSES 15
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Palm Jumeirah
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alm Jumeirah is the largest artificial island in the world and one of the most spectacular real estate projects in Dubai. It is designed in the shape of a palm tree and consists of 17 palm fronds and a surrounding crescent. An exclu sive vacation and residential destination has been created with elegant restaurants and hotels as well as a mix of residential properties with a wide range of prices. Apartments have been dominating recent sales: AED 1 mil to AED 110 mil (240,000 27 mil euros). For villas in Palm Jumeirah Fronds - Garden, the average price in November 2021 was AED 16,336,256 (3,920,000). Year-on-year price change: + 20.62% in median price.
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Tilal al Ghaf
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he project, which is still under construction south of Sports City, has an upscalecharacter. Mixed use is envisaged with residential, leisure and enter tainment facilities. The centrepiece of the development will be a large lagoon on 7 hectares. Predo minately villas and town houses will be built. Villas/ median price/4 BR/finished: AED 3.914 mil (€940,000). High-end properties up to AED 8 mil (€1.92 mil). Townhouse/median price/ from plan/4 BR: AED 2.929 mil (€703,000). Year-on-year price change: +20.62%.
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Emirates Hills
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he Beverly Hills of Dubai has ultra-luxurious villas on the world-class Montgomerie Golf Course. The beautiful landscaping suits what is arguably
Dubai’s most exclusive address. New construction projects are few and far between. Villa prices from AED 23 mil (€5.5 mil).
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Arabian Ranches
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his is a development area that started in 2004, and it is the largest of Dubai’s premium gated communities (62 ha.). Expats and families like the quiet and dignified ambience on the edge of the desert. It’s drier and hotter here than right on the water. Amenities include a golf course, 2 lakes, 2 polo fields and 15 tennis courts. The
community is divided into Arabian Ranches 1, 2 and 3. There are some townhouses, but individual villas dominate the current listings. At the end of 2021, it ranged from AED 1.46-7.2 (€350,000-1.7 mil). The median price for 2021 is AED 1.8 mil (€432,000) and increased by 20.6 % year-on-year.
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Dubai Hills Estate
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he plan is to build an exclusive community in an area covering 1,100 hectares, with parks, gardens, walkways and open spaces. Located south of Business Bay in Mohammed Bin Rashid City (MBC), the masterplan community will be built around an 18-hole Championship Golf Course. It is a family-friendly development that is expected to attract expats. Schools and health care are available. In addition to apartments and high-end villas (also over AED 40 mil/€10 mil), townhouses are also on offer: median price/4 BR/ finished: AED 3.1 mil (€744,000). Current high-end prices up to AED 6 mil (€1.44 mil).
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Apartments: Average sales prices in November 2021 (Top twelve developments by AED/sq. ft. and Euro/m2) AE-Dirham/ft2
Euro/m2
Dubai Creek Harbour
1.594
4.118
City Walk
1.573
4.065
Downtown Dubai
1.543
3.978
Palm Jumeirah Apartments
1.370
3.538
Al Habtoor City
1.344
3.473
Business Bay
1.334
3.440
Dubai Hills Estate Apartments
1.329
3.430
The Hills
1.321
3.409
Jumeirah Beach Residence
1.310
3.376
Mohammed Bin Rashid City Apts.
1.250
Dubai Marina
1.234
3.182
Dubai Science Park (DuBiotech)
1.103
2.849
3.226
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Villas/Townhouses: Average sales prices for villas in November 2021 (top 10 according to prices of developments in AED and Euro) AE-Dirham
Euro
Palm Jumeirah Fronds – Garden
16.336.256
3.920.000
Jumeirah Islands
7.632.000
1.832.000
Jumeirah Golf Estates Villas
6.205.884
1.489.000
Emirates Living Villas
5.704.762
1.369.000
Mohammed Bin Rashid City TH.
5.185.416
1.244.000
Jumeirah Park
4.413.650
1.059.000
Dubai Science Park (DuBiotech)
4.127.122
990.509
The Villa 4.051.485 972.356 DAMAC Hills Villas 4.028.889 966.933 Motor City Villas
3.885.639
932.553
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Rents and yields
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he yields that can be generated from leasing Dubaipr operty have fallen slightly. In November 2021, it was still 5.68%. The annual average is now 5.91%.put 2021, the value was around 6.5%. It can be assumed that sales prices are currently rising sharper than rental rates. In addition, rents are falling, especially in areas where there is a surplus of apartments. Table 4 provides an overview of rental prices in key communities.
24 Rental prices Dubai/November 2021 Average annual rent in top communities for villas/townhouses ´ AE-Dirham
Euro
Palm Jumeirah Fronds – Garden
648.238
155.577
Jumeirah Golf Estates Villas
404.913
97.179
Mohammed Bin Rashid City TH.
283.183
67.964
Emirates Living Villas
249.392
59.854
Jumeirah Park
225.333
54.080
Average annual rent in top communities for apartments AE-Dirham
Euro
Palm Jumeirah Apartments
165.268
39.664
City Walk
152.279
36.546
The Hills
134.418
32.260
Dubai Festival City
127.506
30.601
Jumeirah Beach Residence
106.128
25.471
Average annual rent in affordable communities/developments for apartments AE-Dirham
Euro
Liwan
31.966
7.671
Dubai Residence Complex
29.192
7.006
Dubai Production City
29.002
6.960
Discovery Gardens
28.618
6.868
International City
22.614
5.427
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ith the pandemic currently flaring up again, there is uncertainty as to whether property prices will be in demand to the same extent in 2022 as they were in 2021. Especially since the market has already cooled down somewhat at the end of the year. This is especially true for completed property and resale/ existing property. Inflation, which will presumably result in higher interest rates, could also generate distortions. Overall, however,
Dubai can rely on an international buyer base that is attracted by the security, climate and favourable tax conditions. Consequently, sales prices will likely continue to trend slightly upward over the next 12 months. By contrast, rental prices could remain under pressure in the coming months, especially in communities where the supply of apartments is very high. Villas in prime locations, on the other hand, are likely to remain in high demand. Yields are not expected to fall in this sector.
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