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In the United Arab Emirates, spending on major infrastructure projects has been the key driver for industry growth over the last decade. With the country aiming to become the top tourist destination in the world, several major infrastructure projects have been undertaken over the years, and many more are in the pipeline, as the Emirates seeks to reduce its reliance on oil. Over the next three to four years, the infrastructure construction sector is expected to record strong growth in the country, on the back of increased spending on transport and road infrastructure, which includes projects such as the US$11 billion Etihad rail project and US$2.7 billion Sheikh Zayed double-deck road project.
Along with the infrastructure construction sector, the growing demand in the luxury housing segment is expected to support the growth of the construction industry in the Emirates. Notably, the luxury housing market is expected to thrive and continue its high-growth momentum in 2022, which is majorly supported by the rising demand and interest from high-net-worth individuals around the world.
The trend has changed dramatically in 2021 and 2022, as compared to what was noticed during the pandemic outbreak in 2020. At the peak of the global pandemic outbreak in 2020, residential units priced at more than US$1 million were seen as a burden on the real estate market in Dubai. The houses were barely getting sold, which meant that very few developers were rolling out new high-end units in the region. However, since the beginning of 2022, which marked a new phase in the Dubai construction industry, the demand for luxury housing units surged even more and is expected to further continue in Q4 2022 and beyond. Consequently, ConsTrack360 expects developers and construction firms to launch several new luxury housing projects in the country in 2022. For instance,
According to a report from Property Finder, the off-plan and secondary property sales have surged to a 12-year high in Dubai in Q3 2022. A total of 25,456 sales transactions were recorded, which were valued at US$18.98 billion. This represents a growth of 62% in volume and 65% in value, compared to the same period in Q3 2021. In September 2022, the residential market recorded a growth of 33.4%, according to a report from CBRE.
One of the major reasons behind the substantial demand for luxury housing properties in Dubai is the influx of overseas investors. The ongoing war between Russia and Ukraine has also supported the rise in demand for high-end housing units in the Emirates. For instance,
This, along with visa reforms and friendly policies, are some of the other reasons that are driving the growth in the residential construction market in the United Arab Emirates. Wealthy foreign investors are expected to show more interest in the luxury housing segment in Dubai over the next few quarters. Consequently, ConsTrack360 maintains a robust growth outlook for the residential construction sector in the Emirates from the short to medium-term perspective.
To know more and gain a deeper understanding of the construction market in the UAE, click here.
