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Momentum in Dubai real estate to carry over into rest of 2021

Dubai’s property sector will sustain a positive momentum in the second half of 2021 as visa reforms, successful Covid-19 vaccination plan and government measures to support the economy spur demand and manage oversupply, experts say.

Analysts and experts said the villa segment is performing better than apartments and positive sentiments will lift property prices up to five per cent during the July-December period this year.

“Depending on the Covid-19 pandemic situation, the second half of this year may continue the positive momentum that began in the third quarter of 2020. This is possibly due to the general positive market sentiment following measures put in place by the government to spur growth in housing demand as well as manage oversupply,” Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times.

He said the excellent countrywide vaccination programme has further strengthened market sentiment.

“With average home prices hovering at Dh900 per square foot and banks offering record-low interest rates coupled with a higher LTV of up to 85 per cent, getting on the property ladder became more affordable,” Tuima said.

Latest data by real estate portal Property Finder indicated that Dubai recorded 27,373 transactions worth Dh61.97 billion during the first half of 2021. This is compared to 35,041 sales transactions worth Dh71.87 billion registered in 2020, reflecting the best real estate performance in terms of sales transactions in the past eight years.

Positive sentiment

“We are seeing the market already bouncing back. The market, across the board, has seen an uptrend. Citywide prices have increased by 1.3 per cent in March this year. This is the first year on year price increase we have since early 2015. Since the market bottomed out in November 2020, prices have recovered up to seven per cent until now,” Ayman Youssef, vice-president at Coldwell Banker

 UAE, told Khaleej Times.

He said sentiment is better in Dubai as the world noticed how efficiently the emirate handled the Covid-19 situation. This has made many luxury buyers consider Dubai as a place to put their investment in.

“We have seen a lot of regional and international buyers relocating to Dubai into the luxury segment because of the attractive prices and strong control of the pandemic. We are seeing a historic time for the Dubai luxury segment. Properties that are Dh10 million and above have seen a historic high market share of 2.5 per cent,” Youssef said.

“Low interest rates have converted many tenants into buyers. The sentiment among investors is improving since the market has already bottomed out and now seeing real demand. Prices are below replacement cost in many areas which is a good entry point for investors.”

He said occupancy is still low in B-grade apartments that don’t provide a lot of amenities and services.

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