Area GuideJanuary 1, 20223 min read

2021: Dubai's Busiest Year in Over a Decade

Transactions in 2021 reached levels not seen since before the 2008 crisis. What drove the surge, how it differs from the boom and what comes next.

David Thompson

Chief Economist

PhD from London School of Economics. David's macroeconomic forecasts have guided institutional investors through three market cycles in the Gulf region.

Dubai's property market has closed 2021 with one of its busiest years on record. Transaction volumes and values reached levels not seen since before the global financial crisis, driven by end users, wealthy international buyers and investors attracted by Dubai's recovery and long-term reforms.

What drove the surge

Relocation: families and professionals moving to Dubai.
Prime demand: record sales of villas and luxury homes.
Residency reforms: long-term visas and remote work options.
Expo 2020: global attention and visitors.
Low rates: favourable mortgage conditions.

How it differs from the 2008 boom

A larger share of buyers are end users and cash buyers, regulation is stronger and mortgage caps limit leverage. However, off-plan activity is rising, and speculation should be watched.

Segments that led

Villas, prime apartments and ready homes led the market. Off-plan sales also increased strongly in the second half of the year.

What comes next

We expect continued strong demand in 2022, with price growth spreading from villas and prime homes to more apartment segments. Rising interest rates globally could affect affordability later in the year.

Risks

Rapid price growth could encourage speculation, and new launches will add supply over the coming years.

The share of off-plan in transactions

Off-plan sales have grown as a share of total transactions, reflecting strong demand for new launches. This is a sign of confidence, but it also means that a large volume of homes will be completed in the coming years. Many off-plan buyers intend to live in or rent their homes, while others plan to resell before or at completion. A healthy off-plan market is one where most buyers can comfortably meet their payments and are not relying on quick profits. Investors should watch how much of the off-plan activity involves resales of contracts, since a high level of quick flipping would suggest speculation rather than long-term demand.