Property price trends in the UAE and real estate market forecast for 2021 | AX Capital

Property price trends in the UAE and real estate market forecast for 2021

How much does real estate cost in the UAE?

Property prices in the UAE depend on many factors. According to experts, the reduction in the construction of new residential projects will definitely lead to an increase in apartment prices in the near future.

Since the beginning of this year, the cost of detached houses has decreased by 3.2% in Dubai. Apartments in high-rise buildings have become cheaper by 1.1%, but despite this, apartment sales were considerably higher than villa sales in 2020.

At the end of 2019, the rent rates decreased by 2.4% in Dubai, as the number of property rental offers is currently exceeding its demand.

Apartment prices in the UAE 2021

Here are some examples:
  • One-room apartments with a luxurious finish cost AED 740,000 in Meydan One. The project in Dubai Healthcare City offers a luxurious apartment with two bedrooms and a wonderful city view at the price of AED 1, 595,000. The project features a swimming pool, a green area and a gym. Near the project, there are plenty of restaurants and famous Dubai shopping malls.
  • Two-bedroom apartments with a luxurious finish can be purchased for AED 1,189,000 in the Al Barsha South district in Dubai Science Park. The project offers a barbecue area, a game room for children, an outdoor playground, as well as a supermarket and a restaurant. Shopping malls, schools and hospitals are located near the project. You can also buy a two-bedroom apartment with a first-class finish for AED 975,000 in Dubai. The rooms and the kitchen feature top-class built-in furniture. The apartment project offers swimming pools, a fully equipped gym and a restaurant. The project also neighbours a golf course.
  • A three-bedroom apartment in Sky View Tower in Dubai costs AED 4,500,000. The residential complex provides private parking and a concierge service. The project is guarded 24/7. Residents can use the swimming pool at any time. It is open around the clock.
  • The Royal Golf Villa in Dubai offers a four-bedroom Spanish-style villa at AED 6,933,000. There is a gym and a swimming pool. Each room has air conditioning, the kitchen is fully equipped and the villa offers stunning sea views.
  • The luxurious villa in Dubai Hills Estate sells for AED 3,048,000. The neighbourhood has a golf club, many modern health clubs, playgrounds for children, running tracks and four schools.
Apartment and villa prices are yet to grow in the UAE in 2021. In light of this, experienced investors and buyers say that it is the right time to buy real estate.

Real estate price dynamics after the crisis in the UAE

According to the International Monetary Fund (IMF), due to the reduction in oil costs and the coronavirus pandemic, the economy of the United Arab Emirates is going to decline by 3.5% in 2021. However, the real estate market has been undergoing changes since 2008 in the United Arab Emirates, so the country’s authorities have learned how to act in a crisis to minimize the economic decline to a lowest level.

The economic downturn was observed from the end of 2008 to the first half of 2011, when the cost of housing and commercial properties decreased by 53%. By the third quarter of 2011, the housing sector began to recover after the global economic crisis, and property prices rose by 67%. Due to the coronavirus pandemic, the demand for real estate slightly decreased in 2020. The property market offered 56,000 new properties in 2019, and 575,000 homes have been sold in Dubai now.

The new housing sector, Abu Dhabi, was refilled with 8,000 new options last year. There have been 265,000 new apartments sold in the city by now. Due to the supply and demand difference, property prices in 2020 and early 2021 are not going to increase. However, the situation may change because of the world exhibition, “Dubai Expo”, which is planned to be held in the country in 2021. According to real estate experts, this event will boost home sales and rents.

Local developers are planning not to build as many projects in the United Arab Emirates for the next few years as in previous years. The number of offers from construction companies will decrease, which may lead to an increase in the cost of housing. The Dubai Land Department has doubled the fee for registering property ownership to reduce consumer demand. Now you have to pay 4% of the apartment price instead of 2% as was before. The average property price in Dubai is 5,920 dollars per square meter, so most apartments with an area of 120 m2 cost about 711,000 dollars in the center of the city. You can rent out such an option for 3,000 dollars per month, which gives you about 5% annual profit.

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