The Dubai real estate market witnessed an uptick in new project launches during the first quarter of 2022 as the emirate emerged as a favourite destination for high-net-worth individuals, including millionaires and entrepreneurs, following successful handling of the Covid-19 pandemic, pro-business environment and recent visa reforms, according to the latest report.
The new project announcements during the January-March quarter surpassed pre-pandemic levels, reflecting the positive market sentiments. About 25 new projects, comprising 6,677 residential units, were announced during the quarter that will cater to the growing demand from investors.
The number of residential units in new projects announced during the first quarters of 2021 and 2020 was extremely low because of Covid-19 and tighter regulations around new supply as new project announcements dropped to six in 2021 and 16 in 2020 with 1,945 and 5,430 residential units, respectively. In the first quarter of 2019, the emirate witnessed the announcement of 31 new projects to build 5,896 residential units, according to the Cushman & Wakefield Core report.
Prathyusha Gurrapu, head of research and advisory at Cushman & Wakefield Core, said several noted developers' projects are witnessing strong absorption, boosting off-plan sales and demonstrating Dubai's renewed investment momentum and consumer confidence.
“Coming off from historically low new project announcements over the last few years due to Covid-19 and dampened market conditions, recent quarters have seen a sharp uptick in new project launches with the first quarter of 2022 launch volumes surpassing pre-pandemic level, underpinned by the overall positive market sentiment," Gurrapu said.
New projects, branded residences
The real estate consultancy report highlighted some of the new prominent project announcements in the first quarter and how the emirate continues to lead global rankings with the highest market penetration of branded residences.
"Beach Mansions in Dubai Harbour by Emaar, La Violeta by Dubai Properties in Villanova and Peninsula by Select Group in Business Bay are some of the new projects announced in the first quarter," Cushman & Wakefield Core said in a report on Wednesday.
In branded residences, the report identified Six Senses Residences on Palm Jumeirah, St Regis the Residences, Downtown Dubai and the Ritz Carlton Residences Creekside as some of the major projects announced during the quarter.
"With demand outstripping supply in key segments, we expect an upward trajectory in enquiries, transaction volumes, prices and occupancy levels to continue over the remainder of 2022, albeit with an interim marginal slow down during the summer months," the Cushman & Wakefield Core report said.
Rising population, business reforms
Ata Shobeiry, chief executive of Zoom Property, said that rising prices and demand have given a push to developers as they have come up with a new line-up of real estate projects in Dubai.
"Other key factors include the increasing population in the UAE and the latest business reforms, attracting overseas investors and business. The first quarter already saw the launch of several projects and delivery of 6,700 units. The rest of the year is also expected to follow the pattern with the anticipated delivery of 31,000 units," Shobeiry said.
Citing continued economic, social and visa reforms aimed at attracting FDI and residents, the report said relatively low levels of ultra-prime supply and rising HNI demand are some of the key growth drivers for Dubai's real estate.
In addition, the Russia-Ukraine crisis has been drawing liquidity and investments into Dubai from the affected regions. The Emirate offers competitive entry prices to foreign buyers and investors compared to other global cities, the report said.