With UAE’s economy recovering well from coronavirus, it comes as no surprise that Dubai’s real estate market experienced steady growth since the first half of 2021. The big question, however, is — will Dubai’s property market continue to rebound in the rest of 2021 and beyond?
If the latest trends are any indication to go by, the answer is likely to be ‘yes.’
So, what are the factors that have helped Dubai’s real estate market to rebound so well? According to the experts there are several contributing factors, the two most important ones being a successful Covid-19 vaccination plan and visa reforms. Experts are also almost unanimous in their opinions that the positive measures taken by the government to support the economy has also spurred demand in Dubai’s real estate market.
In this post, we will look at some of the latest trends in Dubai’s rebounding property market.
At present, the villa segment of the Dubai’s property market is performing much better compared to apartments, and this trend is likely to continue in the future as well.
The positive momentum started building in the 3rd quarter of 2020 and has continued throughout 2020 and the first half of 2021. This has been possible because of the general positive market sentiment following improvements in the Covid-19 situation and concrete steps taken by the government to improve growth in the housing market and manage oversupply.
The latest real estate data also confirm that Dubai’s real estate is rebounding exceedingly well. While Dubai recorded 35,041 sales worth Dh71.87 billion in 2020, the first half of 2021 has seen 27,373 transactions totaling Dh61.71 billion. According to the experts, this is the most impressive real estate performance in terms of sales transactions in the past 8 years.
The real estate market is experiencing an uptrend across the board. Real estate prices have jumped by 1.3% in March 2021 compared to March 2020. On year-to-year basis, this is the first increase recorded since 2015.
Dubai’s real estate market bottomed out towards the end of 2020 (somewhere around November). Since then the real estate prices have jumped 7%.
It’s no secret that the UAE has handled the Covid-19 crisis much better than many other countries. This is perhaps the biggest reason that why right now a large number of luxury buyers regard Dubai as the best place to put in their investments.
Many international and regional buyers have relocated to Dubai, spurring growth in the luxury property segment. In addition to a strong response to the pandemic, attractive prices are another key reason that has helped Dubai attract luxury buyers in hordes.
According to many real estate experts, the present is nothing short of a historic time for the luxury real estate segment. Data, also points toward the same thing. Properties worth Dh10 million and more have recorded an all-time high market share of 2.5%.
Some other factors that have contributed to this uptrend are as follows:
Even though Dubai real estate market is rebounding impressively, there are some lingering issues. For starters, occupancy rate in B-grade apartments which don’t offer many modern amenities is on the lower side. With that said, most experts agree this is nothing to worry about as it is a sign that people in this new “work-from-home” environment prefer better housing options such as A-grade apartments, townhouses, or villas that usually offers bigger space and more amenities. Perhaps this is the reason why the demand for beachfront properties has also jumped up.
However, off-plan market activity is expected to continue facing headwinds. According to experts, it has contracted by 29% on year-on-year basis in the first half of 2021. Nevertheless, they are also hopeful that improved demand and sentiment will soon improve things in this segment as well.
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