Dubai property transactions hit $16.85 billion so far in 2022

The Dubai property market is shrugging off the inflation threat with AED 61.9 billion ($16.85 billion) worth of apartment and villa transactions so far in 2022, according to Knight Frank.

The property consultancy said it believes global inflation spikes are likely to have a limited impact on the UAE economy and Dubai’s residential market, for now, thanks to a series of factors, including a diversified import strategy by the government, steps to boost food security and the strength of the US dollar.

Regarding interest rate rises and their impact on buyers who take mortgages to finance their purchase, Knight Frank said mortgaged buyers account for just 18 percent of Dubai’s residential market value at present, while last year the figure was 40 percent, and in 2007, just over 50 percent of transactions were financed.

 Ashley Bayliss, partner, head of mortgage and debt advisory, said: “While this appears to be a decrease in residential mortgage lending, as at the end of May, there has been almost AED 38 billion of financing extended across all real estate asset classes,” he said

 “Extrapolating the number of transactions, we have seen so far this year, 2022 could be on course to see the second-highest level of mortgaged deals in the last five years for the whole real estate market.

The main challenge is for banks to keep pace with the current growth of the market.” Knight Frank said the highest price transactions tended to be cash purchases, due to the “unrelenting influx” of ultra-high net worth capital targeting Dubai’s most expensive homes.

Faisal Durrani, partner, head of Middle East Research, said that growth in property prices in Dubai this year is expected to be 5-7 percent for the mainstream market and 12-15 percent for the prime markets.

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