UAE Residential Report, Q2 2021

RESIDENTIAL TRANSACTIONS REACHED SEVEN-YEAR HIGH OVER Q2

The UAE saw a notable increase in residential sales over Q2, with renewed market confidence, and improvements in the wider economy, buoying demand.

Dubai’s total residential transaction value recorded a near 50% rise quarter-on-quarter (q-o-q), reaching AED 31.02 billion, up from AED 20.77 billion in Q1, marking a seven-year high. Abu Dhabi developers reported strong sales across off-plan schemes over Q2, with the quarter further witnessing the announcement of new project pipelines.

Villas across Dubai and Abu Dhabi saw sustained interest, with average Dubai prices rising by 5.7% q-o-q. Abu Dhabi villa prices also rose over Q2, albeit by a more marginal 0.3%, following a 2.2% rise the previous quarter. Villa prices across both emirates surpassed their Q2 2020 averages, up by 9.1% in Dubai and 2.2% in Abu Dhabi, year-on-year (y-o-y).

Villa rents also fared comparatively well over Q2, with continued tenant demand for larger accommodation and outside space supporting uplifts across both emirates.

Apartment values increased moderately on average, with prices rising by 0.8% in Dubai and 0.5% in Abu Dhabi, q-o-q. Performance continued to vary by location, however, with more established residential areas typically seeing modest uplifts and secondary locations often recording declines. Annually, Dubai and Abu Dhabi apartment prices were down 3.7% and 0.8%, respectively.

Apartment rents across both emirates recorded modest Q2 declines, with continued unit handovers, along with changing tenant preferences, placing downward pressure on rates.

While upcoming supply may challenge apartment sector performance over H2 2021, we expect demand for villas to continue, with ongoing international buyer interest, along with sustained tenant demand, set to underpin both sales prices and rents medium-term.