UAE Residential Report, Q3 2021

RESIDENTIAL TRANSACTIONS REACHED NEAR-RECORD HIGH OVER Q3

The UAE saw a sustained rise in residential transactions over Q3, with renewed market confidence, and continued international interest, underpinning sales.

While transaction volumes increased across both Dubai and Abu Dhabi, the former witnessed notable growth, with off-plan sales regaining pace and an influx of new residents driving end-user demand.

Dubai’s residential transactions approached record levels over Q3, with total sales value recording a 10% uplift quarter-on-quarter (q-o-q), reaching AED 34.11 billion, up from AED 31.02 billion in Q2.

Villa prices continued to rise ahead of the wider market, with average values in Dubai climbing 6.4% q-o-q and surpassing their Q3 2020 level by 17.1%. Abu Dhabi villas recorded a more marginal 0.9% quarterly uplift, leading to a 3.3% rise year-on-year (y-o-y). Apartment values also rose across both emirates, with Dubai and Abu Dhabi recording quarterly uplifts of 2% and 0.7%, respectively.

Rental performance varied between Dubai and Abu Dhabi, with villa and apartment rents in Dubai rising by 5.2% and 0.6%, respectively, q-o-q. Dubai villa rents saw annual gains of 12.6%, while apartment rents remained 4.7% below their Q3 2020 average. Conversely, Abu Dhabi rents recorded marginal declines, with villa and apartment rates dipping by 0.3% and 0.7%, respectively, q-o-q.

The divergence in performance between the two emirates highlights their varied demand drivers, and the scale of recent international interest in Dubai.

Overall, we expect the UAE’s residential sector to enjoy a strong final quarter, with recent visa reforms, a more favourable economic climate and buoyant market sentiment set to support sales. Dubai will further benefit from Expo 2020, with the event likely to bolster demand for short-term rentals and provide a backdrop for developers to launch off-plan projects.