Dubai real estate back in demand; prices to go up
Dubai real estate will stage a strong rebound in second half due to stimulus packages, visa reforms and strong demand from end-users and investors
The Dubai real estate market is gaining momentum as the emirate emerges from a Covid-19 induced slowdown and will stage a strong rebound in second half due to stimulus packages, visa reforms and strong demand from end-users and investors, experts say.
Leading developers, executives and analysts said residential segment has already bottomed out and offers good opportunities for developers on premium properties. They said prices for villa and townhouses have already registered an upward trend in past seven months and apartments prices are also expected to reflect the stable trend in second half.
“The outlook is bright. It’s not merely an assumption, but based out of rationales. In my opinion, the recovery was overdue, and it has only got boosted with how the Covid-19 crisis has been handled in Dubai,” Atif Rahman, director and partner at Danube Properties, told Khaleej Times on Monday.
Referring to latest data, he said entry of 8,000+ new investors into the Dubai property market during the first half despite the fact that the international travel and migration are at their lowest due to Covid-19 restrictions.
“This is due to the first-class infrastructure built by Dubai; the strength and resilience of which has been wonderfully demonstrated during a global crisis. Dubai goes beyond tourism, leisure, and lifestyle; it’s a stable economy supported by constant improvement initiatives from the visionary leaders and the government bodies,” he said. “Look at the most recent announcements such as immigration reforms, trade liberalization and 2040 masterplan, all are focused on making the city and the economy better for its people. Now all of this attracts fresh FDI and immigrants leading to surge in population, which increases the domestic consumption.
bai’s residential real estate sector will linger, we think that demand for good-quality, premium assets will support sales in 2021. We expect 30 per cent to 35 per cent revenue growth in 2021, from high demand for residential real estate in Dubai and recovery in other business segments, namely the retail and hospitality sectors,” they added.
Zhann Jochinke, chief executive of Property Monitor, said Dubai real estate market has witnessed a resurgence with prices appreciating slightly more than 10 per cent over the past seven months.
“Year-to-date 2021 property prices emirate-wide for Dubai have increased 8.3 per cent and I foresee that appreciation will continue through the remainder of the year however expect rate of price increase to slowdown in the coming months,” Jochinke told Khaleej Times on Monday.
A sustainable recovery
To a question about recovery is sustainable, he said: “In short, yes, however at a subdued pace particularly in the resale market of completed properties.”
He said a large driver of the recovery to date has been due to the sale of villa and townhouses in mature communities where end-users were for a time able to find incredible value. “With inventory in these areas becoming scare and prices rising at a rapid pace for prospective buyers who are familiar with the market have begun to pull back and not appease seller’s aggressive expectations.”
He said some of the fringe communities or less popular communities are yet to see overall price appreciation, however the market has begun to show signs of price stability and over the coming months will likely continue to see positive growth.
Regarding the off-plan market, he said a continued recovery will be heavily dependent on the level of new supply being approved to come to market for sale.
“New supply will be organised due to the oversight of Sheikh Mohammed bin Rashid Al Maktoum’s higher committee of real estate [announced in late 2019] and it will be closely monitored and is likely to result in significantly fewer new project launches than in recent years,” he said.
Expo to boost confidence
Nikita Kuznetsov, chief executive of Metropolitan Premium Properties, said the real estate outlook appears positive for the second half of the year especially with Expo 2020 just around the corner. He said the resale market is on an upward trajectory thanks to a steadily growing economy encouraging residents and citizens to move home to bigger and better options.
“We also are seeing more people relocating or investing in a second home here in Dubai or the UAE due to the positive steps taken by the government to battle the Covid-19 pandemic. We have also seen a spike in the number of transactions for villas and townhouses, with a notable interest and high demand in waterfront or shoreline property,” Kuznetsov told Khaleej Times on Monday.
Metropolitan Premium Properties is a full-service real estate agency offering customised solutions to developers, owners and investors who are looking to maximise value from their luxury real estate assets.
“With one of the largest premium property portfolios in the UAE – 20 per cent of our listings cater to properties over Dh10million, we have also seen strong demand for luxury property from overseas investors,” Kuznetsov said.
He said nearly 30 per cent of our transactions last year were from our international clients primarily from the UK and other parts of Europe including France, Germany and Austria and “we expect this trend to continue”.
“Location wise areas such as Dubai Marina, Downtown and Palm Jumeriah are consistently active, as well as the off-plan market showing impressive new projects that sell out at pace,” he said.
Why people are investing in Dubai real estate
• Safety and security
• Capital appreciation
• Modern-day lifestyle
• Tax-free, stable economy
• Excellent infrastructure
Dubai property is back in demand
* 8,000+ New investors entered into the Dubai property market in H1
* 30%+ Revenue growth for real estate companies in 2021
* 10%+ Increase in Dubai real estate prices since November
* 8.3% Average jump in Dubai properties this year so far
Source: Khaleej Times