HomeUAEDubai real estate sector doing well in Q2 2022

Dubai real estate sector doing well in Q2 2022


DUBAI, 14 July – Mortgage activity in the Dubai real-estate sector is likely to be impeded in the coming months by the US Federal Reserve’s plans to rapidly increase interest rates, luxury real estate brokerage and firm Morgan’s International Realty has predicted in its Q2 2022 property market report.

“The mortgage market will inevitably be influenced by these reforms, which are implemented to combat inflation,” Elias Hannoush, Managing Director, Morgan’s International Realty, said in the report.

Mortgage transactions have remained stable year-on-year, registering 4,820 deals in Q2 2022, compared to 4,764 in Q2 2021. However, quarter-on-quarter, the numbers have increased marginally from 4,415 in Q1 2022. On the other hand, cash transactions were down 20.5% to 8,611 in Q2 2022, compared to 10,833 in the year-earlier period.

“The mortgage transactions remained constant despite recent interest rate hikes announced by the Central Bank of the UAE,” Hannoush said, adding that existing investors and new property purchasers have rushed to secure financing during the quarter at the present rates.

Most loan takers opted for a fixed-rate structure to prevent future anticipated rate hikes that may be imposed to curb rising global inflation.

However, positive factors such as foreign direct investment, a growing population, and government initiatives support long-term growth that may help mitigate the negative impact of mortgage borrowing power and the US dollar’s strength compared to other major currencies.

Total sales in the primary and secondary market saw significant growth in Q2 2022, surging to AED 18.55 billion and AED 40.45 billion, respectively.

The report stated that the performance of the residential luxury property (AED 10 million and above) and ultra-luxury property ($10 million and above) segments reflected an increase in millionaire migration to Dubai.

The number of transactions above AED 10 million increased by 113 per cent year-over-year as transaction value jumped by 141%. The ultra-luxury property segment grew 28% annually and 50% quarterly.

“In light of the global political and economic climate, we anticipate that Dubai will attract a greater number of ultra-high-net-worth individuals, resulting in a robust performance of the luxury market sector through 2022 and beyond,” Hannoush said. — Zawya


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