Demand for spacious villas will remain robust in the short term across the UAE, continuing a trend that emerged after the pandemic lockdowns, according to new research.
The Q3 2021 UAE Real Estate Report by property management experts Asteco said the post-Covid resurgence of the UAE’s real estate market continued apace between July and September, particularly in the villas segment which saw up to 37 percent annual rises in sales prices.
In Abu Dhabi, Asteco said developers delivered approximately 2,200 residential units in Q3, a slight uptick from 2,070 units offered in Q2.
An additional 4,600 residential units are due for delivery in Q4 although some projects may be delayed and spill over into 2022, it added.
Apartment rental rates were largely unchanged from the second quarter but apartment rates softened marginally year-on-year, registering a 2 percent drop compared to the same period last year.
Incentives such as multiple cheques, rent-free periods and waived/discounted agent commission fees boosted demand, Asteco said.
The villa rental market continued to flourish, particularly in well-developed villa communities in Saadiyat Island, Yas Island (pictured below), as well as Raha, Golf Gardens and Bloom Gardens. Average villa rental rates increased by 3 percent in Q3.
Apartment sales prices in the UAE capital remained constant, although some developments recorded an increase in demand, which was reflected by a slight boost in sales prices.
New off-plan villa projects continued to attract high demand in Q3, Asteco said, adding that villa sales prices increased significantly in the third quarter with an average growth rate of 8 percent.
In Dubai, new residential supply slowed significantly in Q3 compared to the previous quarter due to continued Covid-19 linked restrictions and delays.
Only 100 villas were delivered in the quarter while the number of completed apartments stood at approximately 3,600.
Based on recent construction progress and developer announcements, Asteco said it expects another 9,300 apartments and villas for handover by year-end although delays may occur.
Apartment and villa rental rates continued to record rises in Q3, with 3 percent and 6 percent quarterly increases, respectively. Annual rental growth in the villa market was particularly significant at 19 percent growth, while average apartment rental rates rose marginally by 3 percent year-on-year.
Villas remain the primary focus of customer demand, and the limited number of new handovers translated into higher asking rates. Sales prices recorded a significant surge, with average quarterly and annual increases of 9 percent and 37 percent.
Asteco said the strong demand in villas has also positively impacted apartment sales price growth, which, although less pronounced, was still considerable at 6 percent over Q2 and 14 percent over the year.
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