DUBAI, United Arab Emirates - Despite macroeconomic volatility affecting the global real estate landscape, the UAE witnessed strong momentum in the final quarter of 2022, heralding a steady growth pipeline for 2023.
Against the same backdrop, JLL's UAE 2022 Review provides a rear-view mirror view of 2022, while highlighting the year's opportunities.
Faraz Ahmed, Research Associate at JLL MENA, said." 2022 is a year of continued growth for the UAE's real estate sector as it continues to gather pace while benefiting from the country's reliable economic policies, excellent infrastructure, safe haven status and innate ability to adapt to new trends. Even sectors such as retail, which faced headwinds initially this year, recovered significantly in the last quarter. Looking ahead, we can expect the UAE to continue to attract the attention of regional and international investors with aspirational offerings in the sector."
Residential transaction activity in Dubai has continued to grow strongly over the last year.
Data from Dubai Pulse further suggests that the emirate saw a 51% increase in transaction volumes between January and November 2022, while transaction values increased by 55%. Anecdotal evidence suggests that this jump is largely attributed to a surge in demand from foreign buyers.
In addition, the delivery of 38,000 residential units last year brought Dubai's total supply to 680,000 units, while in Abu Dhabi, the delivery of some 6,000 units brought the capital's residential stock to 279,000 units.
In 2023, planned completions will be slightly higher in Dubai (41,000 units) and 6,000 units in the capital.
On an annual basis, average residential sales prices increased by 10% in Dubai and 3% in Abu Dhabi in the fourth quarter of 2022. While rents in Dubai increased by 27% over the same period, rents in the capital remained largely flat.
The outstanding performance of the residential sector once again reflects Dubai's relative safe-haven status in the context of the geopolitical and economic challenges prevailing in the world.
That said, the strong residential activity can also be partly attributed to the fact that prices remain attractive compared to other major cities around the world.
Against a backdrop of increased demand, the pipeline of projects announced by developers in 2022 has increased to 27,000 units, which will be delivered in the coming years.
However, it is worth noting that investors and end-users are typically making more informed decisions and being more selective in considering which properties to buy.
As a result, developers need to differentiate their offerings from their competitors and offer units of a higher standard.
