The rise in Dubai Real Estate property transaction

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How are the Dubai Real Estate Property transactions ?

Amidst the current pandemic and change in the much-anticipated event- EXPO 2020, the United Arab Emirates real estate market (villa for sale, apartment for rent, luxury properties for sale and more...) witnessed a reasonably good increase in the number of investments.

According to the latest 2020 Frank Knight report, the impact of the COVID-19 pandemic across the GCC countries has caused some changes in property investments this year. The UAE government made it possible for investors to effortlessly own properties in Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah and other emirates. The Q1 of 2020 saw an increase in transactions of over AED 594 billion in real estate. With this estimate, there was a reassurance of an incremental sale of property for the next quarters. According to Dr. Michael Waters, Associate Professor in Real Estate at Heriot-Watt University Dubai, the current trend in the real estate market due to COVID-19 has been good news for investors, especially in the long term. 

The top five reasons why people have chosen to invest in the UAE in this period are:

  • Benefits from the government: To maintain the market, the government has made some excellent changes to its policies for the local and expat property investors. 2020 has the potential to be an overall great year for real estate with the ‘Golden visa’ plans.
  • Lending policies: If you are a first-time investor in Dubai, there are fantastic options in financing your property. Higher value loans in the form of mortgages are available, and this is an offer open to expats as well as Emiratis.
  • Property prices: You will find this year friendly for buying a property with great deferred payment options. Therefore, the idea of a favorable investment is a good deal for those of you who would otherwise pay rent. 
  • A secure market: Investments made in the UAE are considered favorable and safe.
  • First-time investors: The idea to invest becomes more apparent; therefore, residents interested in properties for sale in Dubai are finding this the perfect time to do so.

With Dubai ranking as the third most affordable major city in the world, many residents choose to invest in the hopes of getting a high ROI, especially in luxurious communities. The fact that several property websites show a decrease in prices doesn’t in any way reflect a decline in value but rather a sign for investors to make the most out of the moment. Most of the luxury villas are now worth far less than the initial prices, which leads to a lesser pay for a top-notch property. Research conducted by Devmark, a UAE-based real estate consultancy and advisory firm noted that the pandemic brought about a weak performance of the US dollar. Findings in the last quarter of 2020 have led to an increase in the purchase of properties by international investors. 

The up rise in demand for luxury properties for rent or sale in some communities has been a significant driver of relocation though prices remain slightly competitive. Established neighborhoods reported minor declines of under 5% in both rental and sales markets, according to real estate market report for Q3 2020. This, in turn, gives the property market promising signs of significant growth by 2021. According to Mr. Walid Farghal, Director General of the International Property Show and Deputy Chairman of Dubai Property Festival, “IPS 2020 will highlight investment opportunities in the UAE and will further give a boost to the country’s real estate market.”

Also, the pro-investment initiatives launched by the government that provides a comprehensive plan to support the real estate sector magnifies its appeal to property developers and stakeholders. Other recent announcements including the first-of-its-kind retirement visa scheme, spearheaded by the Department of Tourism and Commerce Marketing, and the updated dates for the Expo 2020 Dubai have also kept the emirate’s real estate sector in the limelight.

Aside from that, the country’s reputation as an ideal investment destination makes it a perfect place to promote investment deals to global investors.”

 In the first quarter of 2020, DLD recorded a total of 2,480 sales transactions, with 31.5% in the off-plan segment and 68.5% in the secondary segment, bringing the total sales year-to-date to 20,614 transactions worth $11.3bn (AED41.7bn). According to the DLD, 8,137 real estate transactions were recorded in Dubai in Q3 2020, reaching a total value of $4.65bn.

Over the years, the summer months have been quite unfavorable for some real estate companies in Dubai considering the summer holidays. Luckily, there was a difference in real estate transactions in 2020 due to the COVID-19 pandemic, as most residents did not travel. Despite August being a slow month for Dubai real estate as compared to the rest of the year, in 2020 the month shone as compared to all others. Richard Waind, the Managing Director of ‘Betterhomes’ says his company has been working to find residents suitable homes. His work was done during the summer, and he believes it’s been a direct result of the lockdown. He believes Despite COVID-19 having an evident impact on the third quarter of 2020, there are questions whether the industry has bottomed out. For many, COVID-19 has led to job or income losses and financial instability. But for those with cash reserves, they see the current moment as an ideal time to buy.’

For investors, areas that have witnessed a boom in the off-plan segment have easy access to the Expo 2020 site. Meanwhile, the secondary market made a high sale by investors in freehold communities such as Downtown Dubai, Palm Jumeirah, Dubai Marina, Downtown Dubai, and Jumeirah Village Circle.

Since 2019, Dubai Marina has been the most popular area for property sales. In the Q2 of 2020, the community had the highest transaction of approximately 146 property sales. Dubai Marina living has been associated with a desirable and exquisite lifestyle globally. The residential area boasts of a breathtaking waterfront and, the most desirable facilities in the buildings such as a swimming pool, a gym, and a sauna. A comment once received from Miki Mirza, executive director at Devmark about this neighbourhood states that “Marina living has become one of the most appealing and sought-after lifestyles in the world. The neighbourhood is strategically designed with exclusivity, status, leisure and entertainment. It can be found in the meticulously planned Dubai Marina waterfront development.” The upscale community has also experienced a minor decline in price by 2%. The price per square foot in Dubai Marina of an average apartment costs AED1,136. Similarly, this year gave Dubai Marina and Jumeirah Village Circle (JVC) a tie in regards to the most ideal area for investment or buying apartments in Q3 2020. The price-per-square-foot for ready apartments in JVC declined by 2.4%, making the cost of an average apartment to reduce from AED852 to AED832.

Following the rank, Dubai Hills and DAMAC Hills have recorded a close number of sale in the Q2 of 2020. Dubai Hills Estate gives its residents a luscious landscape infused with greenery and modern architectures. On the other hand, DAMAC Hills is a well-established self-contained community with contemporary facilities consisting of villas for rent, apartment, and a hotel. Dubai Hills Estate is popularly known for off-plan developments with more affordable payment plans. For residents willing to rent a property in Dubai, it has also become the most sought-after community for apartment sales. These communities have slowly risen to the top 10 luxury communities to buy properties in Dubai. They don’t seem to relent on their titles.

Downtown Dubai, a community that hosts the famous Dubai Mall, has been one of the most popular buzzing city over the past few years. The decision to invest in Downtown Dubai is inspired by several reasons, such as the ideal location for tourists and central location to a majority of the upscale neighborhoods. It is also close to a variety of transportations, for instance, the metro and bus stations. There has been a minor decline of about 6% in property sale prices. Additionally, the cost of an average property in Downtown Dubai is approximately AED1,719 per square foot.

Palm Jumeirah, an iconic artificial island in Dubai, remains one of the most sought-after holiday destinations. Its prime location makes it competitive with price-per-square-foot for villas averaging at AED2,032. There was a recorded increase in property transaction from Q1 to Q2 of 2020. This popular hotspot is close to Dubai Marina and has generated combined sales of 122 units in the Q2 of 2020.

Other bustling communities include The Address Jumeirah, Marina Gate, Business Bay, Sparkle Towers.  

The increase in the number of transactions in luxury residential neighborhoods during the pandemic shows that Dubai is one of the most secure and sought-after property investment destinations in the world.

In serene residential areas, properties for rent and sale have been on the increase. These fully air-conditioned communities may have been one of the safest locations for families with many kids to live in during the pandemic, this assumption may not be wrong. The areas of highest appeal to families include:

Arabian Ranches.

This ideal prestigious family-friendly community dominated the interest of buyers and investors willing to purchase ready villas or invest in the secondary market in Dubai in Q3 2020.

According to reports from Bayut, average sales price-per-square-foot for villas in Arabian Ranches has experienced a minor decrease of 1.9% in Q3 2020, going from AED886 to AED869.

Dubai Land.

Dubai Land Villas are an exceptional place of world-class leisure, entertainment and sports attractions. Properties in this residential community offer exquisite 4, 5 and 6 bedroom villas for sale. Data from Dubizzle, a popular property website, shows that the price-per-square-foot for ready buildings for sale in Dubai Land has become more affordable going from AED641 to AED627 in the Q3 2020. Besides, Dubai Land has been yielding healthy average returns of 5.9% for investors interested in ready villas. As for investment purposes, affordable developments in this community have become sought-after options for those interested in Dubai’s off-plan market.

Mirdif.

This is a popular gated residential community which is an ideal home to families and working professionals. This residential area has seen a spike in rental transactions. The serene neighbourhood is close to other prestigious communities, and the Dubai International Airport. There are various facilities, such as schools, hospitals, and malls to make its residents more comfortable. Most of its residents are from other Arab countries such as Saudi Arabia, and Palestine. Prices in this neighbourhood have seen a minor decline in price under 5% and a slight increase in sales.

Dubai International City.

International City is a popular and trendy-themed community in Dubai according to some property finder websites. There are a variety of themed buildings in this neighbourhood; the infusion of various cultures in this community makes it ideal for diversity lovers. This community offers its residents a mixed lifestyle option, especially for students in the universities close by. The Dubai International City has an array of modern buildings and phases such as the CBD, Phase 1 and Phase 2. For some years, this community has continued to be the best option for investors interested in purchasing apartments with high return-on-investment, with an average ROI of 8.1% based on projected rental yields.

Other serene communities that have remained increasingly known for ready apartments in Q3 2020 include Jumeirah Lake Towers (JLT), Dubai Silicon Oasis, and Dubai Sports City. These communities have seen minor declines in prices under 5.5%.

In the words of the CEO of Bayut and Dubizzle, Haider Ali Khan, “Over the last three months, we’ve seen several encouraging signs of recovery in Dubai’s real estate sector with things opening up and economic activity gradually returning to successful levels.”

In summary, the increase in property transactions in the Q3 of 2020 further establishes the UAE as an ideal global investment location, family-friendly residential destination, and a safe haven during a worldwide crisis. Based on the trend, the coming year will likely see more investments in upscale communities in Dubai and growth in the family-friendly neighborhoods.

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