Dubai real estate enjoys a busy summer with an uptick in sales
The UAE-Israel historic peace treaty has created positive sentiments and investment hopes in realty
Property prices in Dubai continue their downward trend, declining almost 1.4 per cent on a monthly basis, as per the Property Monitor monthly market report for August. Last month, property prices were at an 11-year low, at Dh807 per square feet. August has always been a slow month for transactions as it’s the peak of summer with many residents and citizens travelling overseas. However, this year because of the coronavirus pandemic, figures have been much better owing to the pent-up demand over the last few months when movements were restricted. As per the report, August compares favourably to both 2019 when a monthly decline in sales volume of 48.5 per cent took place and also 2018 when a decline of 39.9 per cent in sales was registered.
An unseasonal uptick
Zhann Jochinke, COO, Property Monitor, says, “While at an emirate-wide level property prices are on a decline and on pace to breach previous market lows, there is an unseasonal uptick in sales transaction volumes with last month marking one of the strongest August periods in recent years. When analysed at a community level, there is a dearth of inventory in certain communities. In the villa and townhouse communities, such as Jumeirah Golf Estates, Damac Hills, Jumeirah Islands and Arabian Ranches, we are seeing demand outstrip supply with quality resale inventory moving quick. Property prices in such communities have displayed a significant slowdown in price depreciation over the past three months, with some even starting to turn positive.”
He explains, “With memories of mobility restrictions fresh in many owners’ minds, those who may have otherwise considered selling have not listed their properties and are sitting tight, while others are deterred from selling at this time with current market values at historic lows. If good quality ready properties remain in short supply then we expect bidding wars to become more common practice and as a result, witness some modest price appreciation.”
Multiple parties bidding
Andrew Cummings, cofounder and managing director of luxuryproperty. com says post lockdown the real estate market in Dubai has been transformed. “August and September have seen increased transaction numbers resulting in a near doubling of our year-on-year revenue. For the first time in a number of years we have seen multiple parties bidding on properties and in some areas properties selling for over the asking price.,’ he says. Cummings feels one of the reasons for this is supply. “While Dubai is still set to deliver a large number of units this year, at present there is a lack of supply for properties that are in demand. This is either because owners have decided not to sell or have leased the properties, creating an undersupply. This is particularly the case in popular villa communities like Palm Jumeirah and Emirates Living, and in newer areas like District One and Dubai Hills.”
Bilateral relations between UAE and Israel
The UAE-Israel historic peace treaty has created positive sentiments in the property market. Cummings says both the UAE and Israel share many synergies. “The UAE offers an excellent opportunity for Israeli investors looking to diversify their real estate holdings and achieve a good rate of return. The close geographic proximity will also be appealing and compared to many international cities such as London and New York, the shekel will stretch much further in the UAE,’ he explains.
Elaine Jones, executive chairman of Asteco Property Management says the possibility of an “increase in our potential investor base is welcomed, most particularly at this time.” Where Israel investors buying property in Dubai are concerned, Jones says registration of property by any nationality needs to be first approved by DLD. “We expect a clear directive from them shortly,” she says.
Kosher compliant properties
Dubai’s IBC Group is preparing to promote exclusive and kosher-compliant portfolio offerings to investors from Israel in collaboration with its Switzerland based international partner Smiling House. “This has potential for a tremendous amount of interaction between the two nations. Israelis have invested in real estate all over the world, and the UAE market is sure to benefit from this interest. We have received expressions of interest from a 54,000 person strong group of Israeli investors,” says Khurram Shroff, chairman of the IBC Group.
According to him Israeli nationals buy bigger and more private homes than many other nationalities. “We are making all arrangements in our holiday homes to ensure that our Israeli guests are comfortable during Shabbat. This will include electric connections for hot plates, constantly boiled hot water in large nonelectric canisters, automated elevators that don’t require manual intervention, Kosher gold cutlery and much more. In fact, a Kosher compliant stay can be more easily facilitated in a holiday home, rather than a hotel because guests are often unable to press a button for services. Israeli travellers and investors are likely to look with interest, at UAE based holiday homes,” says Shroff.