An Overview of UAE’s Real Estate Market
United Arab Emirates’ real estate is a vibrant and dynamic market. The sector is a key contributor to the government’s shift from oil to multiple income streams. Currently, it amounts to 5.5% of the UAE’s GDP, generating the highest number of jobs for ex-pats.
Regarding making profits, UAE is the best bet for real estate investors. The region offers first-world facilities, tax relaxations, political stability, and a high investment return. Courtesy of these reasons, the UAE has topped the global real estate index for 2022. Abu Dhabi, the capital, alone recorded 19,0333 transactions worth AED 77.6 Billion, and the number for Dubai was AED 528 Billion.
In the future, the real estate industry isn’t showing any signs of slowing down. The future forecasting shows cumulative growth of above 8% in the housing market between 2022-2027
As a real estate professional, if you are familiar with real estate trends, you can make great profits in the residential or commercial sector. It’s fine if you are a buyer, seller, real estate agent, lender, or broker; you should know about the upcoming developments, regulations, interest rates, and home prices in the real estate market.
What Trends Will Affect the Real Estate Market?
UAE’s real estate market will undergo several changes in 2023. The industry will adapt to new construction challenges and regulations imposed by the authorities. Our analysis shows that these five trends will impact the region’s real estate market the most.
1. Villas will rule
For a few years, villas have been the top performers in the UAE market. They’ve experienced several quarter-to-quarter price increments in their market value. The homeowners prefer living in a 3-5 bedroom villa to a simple apartment with fewer facilities. Therefore, they are more likely to match a seller’s asking price.
2. Rising Demand for Luxury Properties
The demand for luxurious residential or commercial properties is growing. In December 2022, a British ex-pat bought an AED 91 Million mansion in Tilal Al Ghaf, the most expensive property in history. The market is expected to grow by 13% in 2023, the highest in the world, and no other market is expected to surpass the double digits this year.
Purchasing above $10 million luxurious houses will break all previous records. Dubai recorded 82 transactions of $10 million or above in the residential sector. This year, the number has been tipped to surpass three figures.
3. Growing Interest in Pre-fabricated Structures
The UAE real estate sector is likely to move towards pre-fabricated structures, and investors are showing greater interest in pre-fab houses. A prefabricated building requires less time, capital, and machinery. You don’t have to relocate residents for construction, either. It provides various design options, such as assembling and disassembling the building on the spot.
You only need an accurate 3-D Printed design and the expertise to manufacture it. Once you do that, you can easily transport and install the house in the desired area.
4. Shift toward Green Building Solutions
The United Arab Emirates is quite keen on shifting towards green energy. The government has announced a green energy policy in 2050, focusing on shifting to environment-friendly materials, including a 70% reduction in carbon emissions.
To prepare for that, the market is looking towards sustainable building materials. Materials like stones, cob, bamboo, earthbag, etc. will be used for being natural. Any materials spoiled by heat, cold, and humidity will be discouraged for harming the environment.
Similarly, when it comes to utilities, the usage of fossil fuels will experience a drastic change. You will see an inclination towards renewable sources like solar panels for electricity generation. So, as an investor, you can take a chance on sustainable buildings for higher profits. Such investments are good for profile and online real estate marketing campaigns.
5. Increasing usage of Smart Building Technologies
The United Arab Emirates is rapidly moving forward toward smart technology. The plan to make Dubai the world’s premier smart city is already in place. For that, builders include technology to automate building construction and management practices.
During construction, innovative technology can offer creative design, 3-D printing, project planning, proper execution, and 24/7 project monitoring by chief engineers and investors. In building management, you can remotely control all locks, doors, rooms, and electrical appliances with the help of an internet connection.
If you own a rental property, you can set up a rental management system to record multiple tenant profiles, building conditions, and periodic maintenance activities with the help of smart technology.
When it comes to the real estate world, change is the only constant. The market is always experiencing new trends, forcing you to develop new strategies and plans. To cope with that, you need an updated real estate market analysis from a professional service.
This blog highlights the five trends which will dominate the UAE’s real estate market. If you are an investor, you can make a general strategy using this information.
However, if you need a comprehensive analysis, reach out to Land Sterling, UAE’s top real estate solution provider with experience in more than 10,000 projects. Contact us to visit any property across the UAE.