Dubai's Realty is Back in the Spotlight!
Dubaiâ€™s Property Sector Hitting 10-Year High
- Real estate markets where individuals and investors flock in droves to purchase high-end properties.
- Number of units sold increased by 70 % in the first half of 2021 compared to the same period last year and 52 % compared to H1 2019.
- Overall positive economic and employment sentiment in Dubai.
- Residents have been investing heavily in the property over the past six months.
- In the first half of 2021, the Dubai property market saw transaction levels at their highest for over a decade.
- Low interest rates and improving job sentiment, coupled with a focus on the "home" brought on by the pandemic, have led to a surge in demand from residents.
Role of Covid-19 Response & Business-Friendly Approach
- Dubai's Covid-19 response and business-friendly approach have won many admirers.
- Investors have returned in large numbers, looking to take advantage of both improving capital growth prospects and attractive rental yields, which remain higher than most established markets.
Market Transactions & Prices
- Prices would continue on an upward trajectory for the next couple of years with the US Fed reserve indicating that interest rates will remain at their current low levels well into 2022 and the supply of new units peaking and expected to drop from next year.
- Rental prices lagging sales prices in many places, we see investor margins are being squeezed, especially in periphery communities with lots of new apartment supply, expecting continue to see some winners and some losers in terms of prices across the market.
- Transactions and prices in villa communities surged in H1 2021.
- Villa transactions increased by 167 % while townhouse transactions increased by 97 %.
- Number of buyers leads for villas/townhouses jumped by 123 %, and the number of villas/townhouses sold increased by 146 %.
- Four-bed villas proved popular in this category with a 26 % increase in transactions.
- Number of UK buyers increased by 600 % in H1 2021 as they jumped from 10th place in H1 2020 to 2nd place in the company's ranking of buyers by nationality.
Prices Increased Some Communities
- Price increased 40 % in The Jumeirah Islands, while at the same time reduced in others by over 25 % in Al Habtoor City and Dubai South.
- Average property prices per sq.ft. increased by 24 % for villas/townhouses and 3.0 % for apartments in H1 2021.
- Residential leasing market in Dubai has followed a similar trend to sales in H1, with tenant leads and rental transactions up significantly compared to the previous year.
- Leasing transactions increased by 31 % while the number of registered tenants increased by 47 % compared to H1 2020.
Market Trends & Demands
- Desire for outside space and home offices has been a key driver for larger units.
- Three-bed apartments and villas were particularly in high demand.
- Many villa communities experienced a sharp decline in rental supply this year as tenants competed to snap up available units, which in turn had pushed prices up.
- Rising rental prices in villas and townhouses have not gone unnoticed by investors.
- Lower service charges than apartments, investors went for smaller villas and two or three-bed townhouses with high rental demand and attractive yields.
- Rental prices of villas followed market trends and increased by 14 %, primarily due to a decline in the inventory in certain communities.