Every year the UAE real estate market becomes more and more attractive for investors and agencies. According to DLD, in May 2022 a total of transactions worth 26.5 billion dirhams (about $70 billion) were concluded. The deals generated over AED240 billion, up 61% from 2021.
The most popular options in 2022 were:
Villas and townhouses
This trend is explained very simply. Firstly, in the UAE, a real estate buyer receives a whole complex with a developed infrastructure (access to parking spaces, a swimming pool, and access to the beach). It should be noticed, a square meter in Dubai costs $3.5 thousand, which is one and a half times less than the cost per square meter, for example, in London.
And secondly, the average cost of renting a house in the center of Dubai is 31% higher than in Paris, 27% higher than in Berlin, and 44% higher than in Madrid, which makes the Emirates an attractive country for investment.
Now in the Dubai real estate market, the most “overloaded” areas are Business Bay, Downtown, Palm Jumeirah, and Marina. They are the most hype, located near the Burj Khalifa on the beach line. The price of housing in any of them varies from $10,000 to $16,000 per square meter.
It is dangerous to invest in these areas of Dubai because there is a risk of losing profit in the next 1-2 years. This market is already overheated, and there is no point in expecting a big increase in the quality of investments from there.
Thus, since the beginning of the pandemic in Dubai Marina and Downtown Dubai, the cost of apartments has increased by an average of 22.7% and 11.2%, respectively.
Luckily for investors, there are plenty of attractive undervalued areas in the UAE real estate market. We have collected the 4 most promising ones, the value of which can grow by 20-30% in the next two years.
Dubai Hills is an area in the center of Dubai, located close to the sea. This is a green “district”, which has developed infrastructure with convenient road junctions. In the next 3-4 years, a metro station will be built on its territory. The cost of real estate has already been growing since the beginning of the year by 20%, it is expected that by the end of the year, it will grow by another 10%.
The UAE government plans to develop the subway towards the second Palma. So this area will be in the middle. Due to its convenient location and developed infrastructure, Expo City will be in demand, especially for long-term leases, as families will mainly settle there.
In addition to a developed infrastructure (two English schools, hospitals, convenient road junctions) and a green area in the form of a huge park area, this location is made in demand by an abundance of points of attraction.
Firstly, a metro station will be founded there in two years. Secondly, at the end of 2023, new beaches with a lagoon will appear where you can swim. Thirdly, the area is home to the most famous equestrian racetrack in the world, which annually attracts a huge number of wealthy tourists thanks to the races. Fourthly, the quarter is located near the Burj Khalifa.
Growth in real estate demand is also predicted at JVC. This is a quiet location, which will also have a metro line.
JVC has all the necessary infrastructure: there are kindergartens, schools, hospitals, and a shopping center. The area is close to Dubai Marina, Palm Jumeirah, and JVT, where the Fashion TV building is under construction. And the road junction allows you to get from JVC to the sea coast in just 5 minutes.
Another plus of the area is that good developers work on its territory. They build houses with great quality in a reasonable amount of time. Because of these advantages, housing prices in JVC are already on the rise. But the increase is still small. So now is the perfect time to invest, because after the opening of the metro, the value of real estate in this area of Dubai will increase significantly.
JVC is in the final stages of completing the formation of the area as a whole and its infrastructure. Given the serious competition and the large number of developers in the area, this pushes each developer to improve the quality of work, finishing materials, and apartment equipment when building in JVC. The area is close to more than ten international schools and thus attracts families.
No wonder JVC turned out to be the most popular area for buying property in Dubai in the first quarter of 2023. During this period: 3,406 transactions worth AED 3.15 billion.