Real estate consulting firms expect rents to continue rising in early 2022
The UAE real estate market continues to recover, but the supply of new housing slowed significantly in Dubai in the third quarter due to restrictions and delays related to Covid-19.
According to the third quarter report by real estate consultancy Asteco released on Monday, Dubai only saw 100 villas and 3,600 apartments while around 2,200 residential units were delivered in the third quarter of 2021 in Abu Dhabi, a slight increase from 2,070 units offered in the second quarter of this year. .
It is estimated that 20,175 apartments and 2,900 villas will be delivered in Dubai while the capital of the United Arab Emirates will see the delivery of 10,300 apartments and more than 300 villas this year.
In terms of selling prices, Dubai market selling prices saw a sharp increase, especially for villas with average quarterly and annual increases of 9% and 37%, respectively.
Asteco expects the growth momentum to continue towards the end of the year and into 2022, albeit at a slower pace, a trend supported by the expected developments stemming from the successful execution of the Expo. 2020.
READ ALSO :
Kundan Choudhary, chairman of a real estate consultancy firm Stones, said demand for luxury properties rose from 20% to 30% last year, while it has increased this year from 10% to 15%. “Many investors are increasingly looking for sustainable and environmentally friendly properties because they want to reduce their carbon footprint. “
Asteco noted that underlying supply and demand fundamentals could dampen sustained real estate market growth and make the recovery in selling prices more likely to be short lived than a mid to long outcome. term.
In Abu Dhabi, apartment selling prices have been relatively stable, with some developments seeing increased demand, which has resulted in higher selling prices. New off-plan villa projects continued to register high demand levels in the third quarter of 2021. Additionally, completed villas, especially in high-quality communities, remained popular.
Villa selling prices increased significantly in the third quarter with an average growth rate of eight percent, mainly driven by existing villa developments on Saadiyat Island and Yas Island.
Rent increase in 2022
Stones on Monday forecast a seven to nine percent increase in the rent for residential and commercial spaces and a nine to 14 percent increase in the price of luxury properties in the UAE in the first quarter of 2022.
In Dubai, apartment and villa rental rates continued to show a noticeable upward trajectory in the third quarter of 2021, with quarterly increases of 3% and 6% respectively.
Asteco noted that villas were the main center of demand and that the limited number of new deliveries resulted in higher rental and occupancy rates.
“As expected, the start of Expo 2020 drove up real estate demand and rental rates. However, the currently perceived positive market sentiment is considered short-term given the large amount of supply ahead, ”Asteco said.
Apartment rental rates in Abu Dhabi were virtually unchanged from the second quarter. However, apartment prices fell slightly year over year, dropping 2% from the same period last year. Incentives such as multiple checks, rent-free periods, and canceled / reduced agent commission fees have boosted demand.
The villa rental market has continued to thrive, particularly in the well-developed villa communities of Saadiyat Island, Yas Island, as well as Raha, Golf Gardens and Bloom Gardens. Average villa rental rates rose three percent in the third quarter of 2021, with some developments registering increases of up to eight percent.
Unlike Dubai and Abu Dhabi, real estate in the Northern Emirates has yet to benefit from the easing of Covid-19 restrictions and improving market sentiment.
Apartment rental rates in the Northern Emirates edged down in the third quarter of 2021, with average quarterly declines of one to two percent.