The villa segment benefitted from the shift towards a work-from-home culture, which resulted in sales prices and rents rising annually by 40 per cent and 24 per cent, respectively, last year, a report by real estate company Asteco said.
Apartment sales prices and rents rose by 20 per cent and 10 per cent, respectively, compared with 2020.
“For certain sectors, the pandemic has exacerbated existing pressures; for others, it appears to have provided a much-needed catalyst for growth,” Asteco chief executive HP Aengaar said.
“One clear beneficiary has been the villa and town house segment. Following the initial onset of the coronavirus and resulting lockdowns, there was a marked increase in activity and prices, and this rally has continued from the first half of 2020 to date.”
Dubai’s housing market is recovering from the impact of the Covid-19 pandemic on the back of Expo 2020, a successful vaccine campaign, improving business conditions, economic reforms and government initiatives such as the golden and retirement visa programmes.
The emirate registered 84,196 property transactions worth Dh300 billion ($82bn) last year, the highest annual value recorded in the city’s history, figures released by the Dubai Land Department show.
About 17,000 residential units, comprising 15,000 apartments and 2,000 villas, were handed over in Dubai last year, according to Asteco.
While about 30,000 apartments and 3,500 villas are expected to be handed over this year, “some of this is expected to be delayed and will eventually spill over into 2023”, it said.
Rents across all major asset classes are set to increase further for “good quality” properties, although at a lower rate.
Sales price growth is expected to ease in 2022, in line with increased supply and new project launches.
“Villas will continue to be the predominant focus of buyer demand and the limited number of new handovers in quality communities should translate into higher sales prices,” the report said.
Abu Dhabi outlook
Villas and town houses in Abu Dhabi also enjoyed strong demand in 2021, particularly within well-developed communities on Saadiyat Island and Yas Island.
Average villa rents increased by 4 per cent, although some communities recorded a rise of close to 15 per cent, Asteco said.
Sales prices rose annually by an average of 14 per cent due to the lack of high-quality completed units available for sale, according to the report.
For apartments, rental declines decreased marginally by 1 per cent to 4 per cent across Abu Dhabi last year, although this was more pronounced in older buildings.
Sales prices increased annually by an average of 2 per cent, particularly over the last six months of the year, Asteco said.
About 7,300 residential units, including 7,000 apartments and 300 villas, were handed over in the capital last year. Most of this supply was delivered in Al Raha Beach and on Yas Island and Reem Island.
Close to 8,500 apartments and 300 villas are expected to be ready this year, said Asteco.
“Several new project announcements are expected in 2022,” the report said.
Dubai residential supply
- Units delivered in 2021: 17,000
- Projected number of new units in 2022: 33,500
Abu Dhabi residential supply
- Units delivered in 2021: 7,300
- Projected number of new units in 2022: 8,800