DUBAI REAL ESTATE ON A REMARKABLE REBOUND
Post-COVID and with the rise in tourism, residential real estate prices in Dubai are recovering strongly from a record low. Muhammad Shafi, CEO at Prescott Real Estate Development shares key observations
Property market in general witnessed an uptick across the globe but Dubai got the bigger and a remarkable advantage due to its quality of infrastructure, good quality life, hospitality amenities, as well as healthcare benefits.
Investors and expats are returning to Dubai’s housing market giving further rise to the property prices, which are expected to rise in 2022. Additionally, visa reforms and 100% business ownership rules have all contributed to attracting new real estate investors and residents to Dubai.
Much of the uplift in the real estate activity is driven by villas and townhouses with prices for villas in prime communities seeing a substantial rise, while apartment price rises lagged those of villas over the last year many prime areas have seen double- digit growth this year.
According to a recent report by real estate investment firm CBRE Group, average residential property prices in Dubai rose by 4.4% in the last 12 months till August, making it the highest annual growth witnessed since February 2015. The report further mentions that Dubai real estate market continued to set new records in Q3 with 15,406 transactions registered by the Dubai Land Department (DLD), 81% up from Q3 2020 and 48% up from Q3 2019.
Overall, sales volumes in the first three quarters of 2021 have already surpassed total annual transaction volumes in all but two of the last 10 full years.
The demand is driven by how Dubai and the UAE government have managed the pandemic, making it an attractive destination for people across Europe, the US, India, and South Africa to relocate. Dubai worked hard during
lockdowns on healthcare and safety, and in ensuring that vaccines were available for everyone. The top-tier management of the pandemic by the government has instilled a sense of safety at large.
Last year, people were confined to their homes due to the pandemic. However with vaccine rollout on a massive scale, tourism saw a rebound and Dubai became a preferred spot mainly because of how the city handled the pandemic. The UAE residential real estate sector has become increasingly competitive.
During the pandemic properties were under-priced, which naturally increased the demand. Dubai in particular also witnessed an increase in leasing activities for such properties.
The increasing spends on infrastructure, relaxed laws for foreign investors, new government initiatives to drive investments, and new project announcements are expected to bring an overall development in the real estate sector which will further enhance investor interest.
In fact, the UAE real estate market is slowly becoming popular for budgetconscious buyers in equal measure. The softening in house prices is steadily making the sector more affordable to investors and end-users.
Off-plan sales accounted for a large share of transactions for properties below three million dirhams, whereas secondary market sales contributed a far bigger share in deals for properties worth five million dirhams and above, suggesting both investors and endusers prefer less pricey off-plan projects backed by post-handover payment plans.
The local property market in the UAE is also maturing, and more developers are coming up with offerings for both ready stock and off-plan units to stimulate demand with local as well as foreign investors.
To further sweeten the deal, developers are also offering attractive payment options to customers intending to turn tenants into property owners.
Overall, developers are acting fast and releasing new projects that cater to people’s needs.
Dubai is one of the best places to invest with projects and communities that have never been seen before.
With the current boom in real estate, we are definitely in a buyer’s landscape. Therefore, it is significant for developers to make prompt decisions, realise buyer needs, and offer competitive deals to stand out in the sea full of new projects.