The value of property transactions in Dubai in the fourth quarter of the year jumped 21 per cent compared to the third quarter to Dh22.07 billion ($6bn) as the emirate’s economy recovered from the pandemic-induced slowdown and government initiatives revived demand.
The number of deals during the three months to the end of December also climbed nearly 25 per cent to 11,065, according to listings portal Property Finder, which helps to compile the emirate’s real estate index with Dubai Land Department.
The increase during the three-month period shows the rebound that began after movement restrictions in the second quarter of the year were eased has continued its momentum. Transaction values and volumes have more than doubled since the second quarter, when transactions worth Dh10.8bn were carried out through 5,521 deals.
Over the course of last year, the emirate registered 35,434 property sales transactions worth Dh72.49bn, compared with 40,132 transactions worth Dh80.99bn in 2019.
A higher committee for real estate led by Dubai's Deputy Ruler Sheikh Maktoum bin Mohammed was established in September 2019 to rebalance a market where concerns of oversupply have pushed prices lower in recent years. However, secondary/ready properties have seen a resurgence in demand.
Deals for completed homes represented 72 per cent of the total value transacted last year, or Dh52.18bn through 20,685 deals. Off-plan properties accounted for 14,749 transactions in 2020 worth Dh20.31bn, according to Property Finder.
“Residents have always been hesitant to purchase property here in Dubai. They didn’t know if they would stay here for a long period of time nor what their situation would be,” Lynnette Abad, director of research and data at Property Finder, said.
“It’s been a reaction of many scenarios in 2020 which have caused the secondary/ready market to excel: proactive government initiatives, affordable housing prices, residents looking for more space or to upgrade because they are spending so much time at home and more supply to add to the offerings.”
______________
Property of the week series: Dh22m Zabeel Saray villa
______________
There were 3,752 properties worth Dh7.52bn registered in Dubai in December alone, according to Data Finder, the real estate insights and data platform under the Property Finder group. Of these, 2,485 were secondary/ready transactions worth Dh6.12bn, an increase of 9.7 per cent from November.
The volume of secondary/ready market transactions in both November and December surpassed seven-year highs, the listings portal said. In contrast, April and May were the lowest months historically for secondary sales in Dubai.
There were 12,978 mortgage transactions worth Dh87.39bn in Dubai last year. Almost all of these were for secondary/ready property, Data Finder added.
“Subject to the health crisis being resolved, the economy is expected to improve. With Dubai Expo and the 50-year anniversary of the UAE, market sentiment is expected to improve and could head towards bottoming out in 2021,” Haider Tuaima, head of real estate research at consultancy ValuStrat, said.
“As developers put new projects on hold, rents and capital values in established Dubai villa locations could stabilise and perhaps witness gradual appreciation. Apartments could follow suit towards the end of the year.”
He added that new government initiatives, including visas for expatriate retirees and the expansion of the 10-year golden visa scheme to attract foreign professionals looking to settle in the UAE, are also expected to support the market.
The UAE also reformed its commercial companies’ law and annulled the requirement for onshore companies to have an Emirati shareholder, which is expected to boost foreign direct investment in the country.
“Subject to the health crisis being resolved, Dubai’s office capital values and rents are [also] expected to bottom out after reaching 10-year lows,” Mr Tuaima said.
