Real estate in the UAE: large investments are a priority for buyers.

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Driven by factors such as a high influx of foreign visitors, ongoing ease of doing business, and protection from global adverse factors like high inflation due to government policies, the UAEreal estate market is experiencing tremendous growth.

In Dubai, the volume of real estate transactions reached a total value of 157 billion dirhams in the first quarter of 2023, representing an 80 percent increase compared to the same period last year, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, reported on Twitter in April.

Real estate sales and mortgages totaling 27.9 billion dirhams were recorded by the Department of Municipalities and Transport (DMIT) of Abu Dhabi in the first quarter of 2023. This figure represents a 147 percent increase compared to the first quarter of 2022. A total of 5,472 sales and mortgage transactions in the capital mark a 66 percent increase compared to the same period last year.

Real estate transactions in Sharjah amounted to 21,486 with a total value of 5.9 billion dirhams, according to the Sharjah Real Estate Registration Department (SRERD). Overall, properties priced between 500,000 and 1.5 million dirhams were the most popular, indicating a strong demand for affordable housing.

In January 2023, the leading developer in the UAE, Damac, predicted growth in the middle-class real estate segment, linking the change in demand to a preference for affordable options, the availability of financing, and changes in visa regulations that allow retirees and remote workers to obtain residency. Sales in Jumeirah Village Circle (JVC), Town Square, and Arjan confirm this forecast. Sales volume in JVC increased by 169.7 percent, with 5,550 units sold in the first quarter of 2023 compared to 2,058 units in 2022. Arjan showed an increase of 87.10 percent, with 1,418 units sold in the first quarter of 2023 versus 758 units in 2022. Town Square became the top area, with 1,451 units sold in the first quarter of 2023 compared to 316 in 2022, representing a growth of 359.2 percent.

According to data from the real estate portal Property Finder for April 2023, 58.2 percent of buyers were looking for apartments. The most popular apartment size among those wishing to purchase housing was the two-bedroom apartment, which accounted for 35.2 percent, followed by one-bedroom apartments at 31 percent. Interest in villas and townhouses was 41.8 percent.

“Overall, the current market situation indicates a significant increase in the number of property owners, demand for more spacious premises, high investment returns, and steady growth in mortgage transactions. We are also observing a shift in consumer behavior towards more long-term investments, as tenants increasingly prefer ownership over renting,” says Scott Bond, Country Manager for the UAE at Property Finder.

The Abu Dhabi developer Bloom Holding shares the same viewpoint. "Investors looking for value for money are increasingly purchasing townhouses and apartments. We have also noticed a rise in demand among foreigners in the UAE, especially for buying townhouses and apartments for themselves and their families. Whether it's young professionals, couples, or families, more and more people want an apartment in mixed-use residential areas that offer all the necessary amenities, such as parks, schools, retail spaces, health centers, and much more," says Carlos Wakim, CEO of Bloom Holding.

For the Dubai developer Samana Developers, the middle-class segment combines affordability and quality - a perception that emerged in 2020. "As Dubai expands and job opportunities arise, there is a need for housing that is more affordable than luxury properties. The middle class offers opportunities for investors and attracts them to invest in stable income and lower entry barriers," says Najmeh Jafari, CEO of Samana Developers.

Moreover, the demand for mid-range villas and townhouses has stimulated the rental market. According to Bayut's 2022 rental market report for Dubai, rental prices increased by 23.4 percent in the affordable segment. Tenants paid an average of 36,000 dirhams for a studio, 51,000 dirhams for a 1-bedroom apartment, and 73,000 dirhams for a 2-bedroom apartment per year. In the capital of the UAE, villa rentals rose by 12 percent in the mid-range segment, while apartment rentals decreased by 9 percent.

The rise in rental prices is prompting people to buy their own homes.

Overall, the volume of transactions in the secondary market increased by 50 percent in 2022 compared to 2021, while the real estate market under construction grew by 84 percent, mainly due to a larger number of new projects and available inventory compared to previous years.

List of upcoming mid-range projects in the UAE:

• Samana Ivy Gardens is the first environmentally and economically sustainable residential complex by Samana Developers, located in Dubai. The project, worth 350 million dirhams, will be thermal-insulated, energy-efficient, and will recycle gray water. Situated in Dubailand, Ivy Gardens will cover 300,000 square feet with 348 apartments, including studios, one-bedroom, two-bedroom, and three-bedroom units, each with its own pool. Other amenities include a fitness club, indoor and outdoor gym, sauna and steam room, a large poolside lounge area, valet parking services, a barbecue area, a children's playground, and an outdoor cinema.
• Westwood Grande II - Inspired by the success of the first phase of the Westwood Grande project in Jumeirah Village Circle, Imtiaz Developments has recently announced plans to launch the second phase of the residential project. Westwood Grande II will offer fully furnished studios and one-bedroom apartments featuring smart home technologies. Additional amenities include a rooftop pool, gym, landscaped gardens, and children's playgrounds.
• Aljada - Active work continues on the development of the Aljada project by Arada in Sharjah. This multifunctional complex is the largest in the emirate and includes 25,000 homes, most of which are apartments. To date, Arada has sold 9,000 homes and completed 6,300. Arada plans to complete the construction of 2,500 homes in Aljada in 2023 and has several launches scheduled. One of the most ambitious projects is a new district, with a launch planned for the end of the first quarter. The master plan for Aljada, worth 24 billion dirhams, includes serviced apartments, kindergartens, four schools, clinics, and two medical centers, four mosques, a bike path, two post offices, a public library, a civil defense center, and a municipality.
• Bloom Living - As part of the Bloom Living project, the Abu Dhabi company Bloom Holding is presenting several mid-range projects that will soon be completed. Bloom Living is divided into three phases: Cordoba, Toledo, and Casares, which are scheduled for completion in the fourth quarter of 2024, the second quarter of 2025, and the first quarter of 2026, respectively. The project offers two- and three-bedroom townhouses and apartments, including studios, one-bedroom, two-bedroom, three-bedroom, and four-bedroom apartments. Cordoba, which is set to be completed this year, was sold out within four hours of the sales launch. All townhouses in Toledo have also been sold out. Bloom launched the third phase of the Casares project in May 2023.

Future trends "The UAEreal estate market is currently in an exceptionally strong position, thanks to almost unprecedented demand from investors and end-users, driven by wise government regulatory policies and a favorable geopolitical environment," says Ahmed Alkhushaybi, CEO of the Arada Group. "Developers are transforming urban...