Market Trends of UAE Facade Industry
This section covers the major market trends shaping the UAE Facade Market according to our research experts:
Increase in real estate construction throughout the country
The Covid pandemic, which has now lasted into Q1 2022, is causing a significant shift in buying behaviour in the UAE real estate market. The property market is now showing a preference for completed residential units over off-the-plan units. This is reflected in sales through Q1 2022, with 70% of total transactions focused on finished units, according to Dubai Land Department data. Because of low mortgage rates, more end-users are continuing to purchase throughout the city. Buyers prefer larger living spaces in low-density neighbourhoods. The average sales price increased by 11% in Q1 2022, owing primarily to premium villa sales. Apartment buildings that are ready to go with larger spaces and a strong community offering also performed well as a stock of ready villas depleted.
Apartments are currently accounting for the majority of total completions in Q1 2022, as new villa supply is limited due to a lack of stock and pipeline. Villa stock in prime Dubai areas is limited, with only 3.6% of planned deliveries in prime submarkets in 2022, keeping prices high. Large developers launched over 10,000 new townhouses and villas in May 2022, but handover is not expected until between the end of 2024 and 2025. Only 30% of the villas being built are in luxury communities with golf courses, such as Dubai South, Dubai Hills, and Arabian Ranches 3, with the remaining 5% being built in prime market areas, which will help prices in those areas stay strong.
Increase in infrastructure investment driving the market
The United Arab Emirates (UAE) has made tremendous strides in sustainable development and economic growth, as well as in the development of clean energy and the efficient management of its resources. According to a UN Industrial Development Organization survey, the country now ranks first in the Middle East and North Africa (MENA) for having high-quality infrastructure that supports national Sustainable Development Goals (SDGs). The country ranked 11 on the global index, ahead of Portugal, Singapore, Finland, Denmark, and Belgium. UNIDO employs a set of 36 metrics to assess the quality of infrastructure for sustainable development in 137 countries.
In the United Arab Emirates, AWS opens its second region. Amazon Web Services (AWS)'s second UAE region will support approximately 6,000 full-time jobs and will represent an investment of more than USD 5 billion (AED 20 billion). The AWS Middle East (UAE) Region has been announced as the company's newest Middle East region. AWS will invest approximately USD 5 billion in the UAE's local economy over the next 15 years as part of its ongoing expansion plan into the UAE. This amount will cover capital expenditures (particularly data centre construction), operational expenses, and purchases of goods and services from regional businesses. As a result, according to AWS estimates, this new UAE infrastructure will add USD 11 billion (AED 41 billion) to the UAE's GDP, over the next 15 years.
When it comes to property investment, the UAE real estate market has become one of the most popular in the world. However, with real estate prices skyrocketing, it's understandable that some investors are concerned about where things will go in the coming years. The UAE real estate market is thriving but volatile. Despite rising prices, there are some reservations about long-term investment in this sector. By 2021, the UAE real estate market had experienced significant growth and had recovered from the pandemic's aftershocks. In 2021, approximately 61,000 properties were sold in the UAE, with prices rising. Almost every street has a new property development, with some even having a waiting list before they are built. Dubai continues to lead the way in economic development and property prices and attracts more international attention than any other city in the country.
