A Quick Analysis of the Real estate sector’s Performance in Q2, 2022

The second quarter of 2022 has been the best quarter for Dubai’s real estate industry since 2009. The sector witnessed a 25% rise in sales compared to the same period last year. Comparing the Q2, 2022 with the Q1, 2022, there was an increase of 9.1% in the number of mortgage transactions which increased from 4,415 in Q1 2022 to 4,820 in Q2 2022. On a year-on-year (YoY) basis, there was a 44% increase in transactions in Q2, 2022 with the number of mortgage transactions increasing to 4,820 deals in Q2 2022, compared to 4,764 in Q2 2021.

With rising awareness about digital payments, the number of cash transactions fell from 10,833 in Q2, 2021 to 8,611 in Q2, 2022. This was a 20.5% decline on a year-on-year (y-o-y) basis. 

Real estate Transaction in Q2, 2022

According to theDubai Real Estate Market Overview 2nd Quarter 2022’ data available on DXB Interact(an interactive data tool launched by the Dubai Land Department this year to provide a comprehensive picture to investors of the real estate market) Dubai real estate sector witnessed 22,482 real estate transactions worth AED 59.3 billion in Q2, 2022.  This includes 15,106 apartments (AED 29 billion), 5,212 villas (AED 17.8 billion), 712 commercial properties (AED 1.3 billion), and 1,452 plots (AED 11.2B) in Q2, 2022. There was an over 6% increase in the value of real estate transactions in Q2, 2022 from AED 55.7 billion in Q1, 2022. 

The total sales in the primary and secondary markets reached AED 18.55 billion and AED 40.45 billion, respectively in Q2 2022.

A Fair 7% Increase in Average Transactional Price 

The average transaction price per square foot in Q2, 2022 was 1,391 AED/sq. ft. – an increase of 7% compared to Q1, 2022, and 22% compared to Q1, 2021.

New Milestones Achieved in June 

June has been the best month in the second quarter of 2022. The number of property transactions increased 41.23% in terms of sales volume and 54.9 % in value terms compared to the same month last year. 

The value of the total number of real estate transactions that took place in June 2022 was AED 22.7 billion – the highest sales figure since June 2009. This was almost 71% of the total 2021 sales volume. The June transaction figures are 32.9% higher in volumes and 24.21% in value terms on a sequential basis, compared to May 2022. Over 60.45% of the transactions were in the secondary market and 39.5 % in the off-plan market in June this year according to DXB Interact.

Most Popular Areas

The top areas which witnessed the maximum average sales price in June 2022 include – Jumeirah Golf Estates, Dubai Marina, and Downtown Dubai. 

The average sales price of a property in Jumeirah Golf Estates was AED 6.46 million, followed by Dubai Marina with AED 1.945 million and Downtown Dubai with AED 1.4 million. Nationalities which have been the top sellers in June 2022 were British, Indian, and Canadian while British, Indian and French have been the top buyers. 

In terms of rental value, Dubai Marina was at the top in June 2022 with an average rental of AED 132,771 followed by Downtown Dubai with AED 130,455 and Dubai Hills Estate at AED 144,955

Millionaire Migration Boosted the Demand for Luxury Properties 

According toDubai Real Estate Market Overview 2nd Quarter 2022’, the number of transactions for luxury residential properties increased by 113% year-over-year as transaction value jumped by 141%, while the demand for the ultra-luxury property segment grew 28% annually and 50% quarterly. Effective handling of Covid-19, Expo 2020, favourable and business-friendly policies, and one of the highest ROI on real estate have resulted in an exponential increase in the migration of millionaires and High-net worth Individuals (HNWIs) from across the globe to Dubai. This has led to a huge proliferation in the demand for luxury residential properties (AED 10 million and above) and ultra-luxury properties (US $10 million and above) segment.