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Dubai's Residential Property Sales Hit New High
Property sales have reached an 11-year high on a monthly basis. At that time, 4 774 units of real estate were sold, which was the highest figure since 2008. And every month becomes almost doubly productive in terms of records.
More investors are seizing the opportunity to purchase property in Dubai as the government intervened. The government's announcement to create conditions to eliminate competition between parastatals and the private sector in real estate has inspired additional confidence in investors.
In addition, given the proximity of World Expo 2020, and with house prices still falling, it looks like investors are overwhelmed by the idea of snapping up all the properties for sale in Dubai.
Breaking real estate sales in Dubai for March 2021
It is worth noting that the majority of buyers in March 2021 preferred buying apartments over villas, which became a new trend compared to previous months. Thus, 71% of transactions were concluded on the purchase of apartments, and 29% were transactions on the sale of villas and townhouses.
It should be emphasized that the real estate market is showing a recovery process, returning to the indicators of 2017. For example, when selling villas, townhouses and apartments, the average price increased by 16.77% year on year.
Many investors, amid restrictions due to the coronavirus, including working and studying remotely, began to choose more spacious residential real estate. In addition, government measures of the national economy and the provision of long-term resident visas for various categories, including foreign retirees and freelancers, are also helping to restore the market.
Dubai's second largest property was also sold in March. It was a mansion in the One 100 Palm community on the artificial island of Palm Jumeirah worth 111.25 million dirhams (US $ 30.29 million). This luxury villa was bought by a Swiss family who live in Monaco and intend to use the house for short-term rent, according to one of the brokers involved in the deal.
Why is it the right time now to buy property in Dubai
Considering that almost 14,000 transactions (33% of the total) were registered in the three months before November 2020, the overall trend for the new year is positive, in particular, due to increased interest in the upcoming opening of Expo 2020, which will take place in October.
As we enter 2021 and move closer to Expo, we expect the number of deals to continue to grow and prices should stabilize in some areas. Some changes in market dynamics are already seen, which is a direct result of Expo. In addition, this trend is likely to continue throughout the year.
In the southern Spanish city of Seville, property prices rose by 23% in the five years before the 1992 exhibition and by 15% in the five years after.
In the Portuguese capital Lisbon, property values in the first three years before the Expo in 1998 increased by 18% and by 60% in the five years after the exhibition. In Hannover, Germany, where the event took place in 2000, prices rose by 12% before and by 40% after the show.
“The authorities are looking forward to long-term growth in Dubai,” said Mirelle Azzam Vidgen, head of strategic consulting at JLL in the Middle East and North Africa. The city's positive business environment is rapidly being complemented by the highest level of healthcare and educational opportunities and a comfortable life, which in turn attracts skilled workers and creates human resources for today's corporations. Expo influences this. The infrastructure of the city has received an incredible impetus, as well as the area of high technologies, the sphere of cybersecurity and communications, which will strengthen the position of Dubai as an important global metropolis,” she added.
What kind of character such a turn has - temporary or permanent, it remains to be seen? The market has clearly demonstrated that it has bottomed out.
Experts point out that for sellers who have already announced their properties for sale, it is difficult to change the price because the levels reached in the market are well received. In practice, the correction has lowered prices to the point where Dubai has not yet become the venue for the World Expo 2020.
Dubai luxury housing market has also revived because the emirate has become a haven for a large number of wealthy Europeans looking for a way to avoid severe repetitive lockdowns at home, and for those attracted by the ease of Covid-19 vaccination in Dubai.
Rise in prices
The average increase in cost of property in Dubai as a whole since November has amounted to 7.5%, and in the popular and most popular areas with buyers - from 10% to 15%.
Recently, there has been a rather serious correction in real estate prices, and now it has reached the upper price segment of the market. But given the speed of price change in some market segments, the question remains whether this growth will be sustainable in the near term.
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