In light of recent global events it is always best to look at data rather than speculate, below I will go through the facts of what is going on in today’s market.
The pain points for 2020 and 2021 were expected to be about property supply but life threw us a curve ball which was not expected by anyone. The crisis has led to a potential wave of residents leaving from Dubai, a few predictions have been up to 10% of the current population. This will obviously have an effect on the leasing market in particular, but just like the previous crisis we survived 10 years ago (as seen in the above image) we will again recover through price adjustments, patience and realistic expectations.
Dubai is now opening up its borders to non-residents starting on the 7th July, and we are already seeing an increase in inquiries and posts across numerous social media groups by people planning their move to Dubai from August/September.
My previous concern for the leasing market for 2020/2021 was the number of villa/townhouses handing over but with the tenant behaviours changing Ie. from close to metro, upgraded to garden, study and “brand new” (as seen on major portals searches), we may now see a positive coming out of the villa/townhouse supply.
So, here are the numbers:
Q1 2019 v’s Q1 2020
Residential Sales Q1 2019
Average Listing Price AED1,273 per sf
Valuation Average AED997 per sf
Transferred AED1,292 per sq ft
Residential Sales Q1 2020 –
Average Listing Price AED1,190 per sf -6% YOY
Valuation Average AED923 per sf -6% YOY
Transferred AED1,318 per sq ft +2% YOY
Note: Average listing prices have fallen on average of 6% across Dubai but some areas have seen less or more, this is purely to give an overview.
January 2020 Apartments May 2020
Secondary Transactions 1,030 294 Transactions -71%
Secondary Market AED1,141,695 AED1,300,594 +13%
Total Sales AED1,175,946,173 AED382,374,521 -67%
Off Plan AED1,449,261 AED1,207,376. -16%
Total Sales AED1,302,885,272 AED1,064,906,550 -18%
Off Plan Transactions 899 882 -1.9%
Apartments have seen the highest drop in transactions which was mainly due to lockdown but average sale price on the secondary market has seen a 13% increase and off plan transactions have seen less than a 2% decrease of sales during the crisis which is positive news for the market. Investors still see a great future in Dubai in terms of real estate investment.
Villas/Townhouses January 2020 Villas/Townhouses May 2020
Secondary Transactions 305 126 -58%
Secondary Market AED3,315,939 AED4,954,512 +49%
Total Sales AED1,011,361,363 AED624,268,463 -38%
Off Plan AED1,649,720 AED1,857,355 +12%
Total Sales AED377,785,916 AED115,155,987 -69%
Off Plan Transactions 229 62 -72%
Villa prices have nearly doubled in the past 5 months mainly due to demand and the type of villa/townhouses which are transacting.
As previously mentioned the villa/townhouse market is very strong at the moment. In the past, July and August have always been busy months for leasing villas due to schools starting in September but this year is different: we have the addition of the ‘post lockdown’ need for outside space. With the extra supply and new communities such as Damac Hills, Dubai Hills, Akoya, Arabian Ranches coming online, supply is varied and prices are attractive. Whereas you will not see as a high of ROI as you normally would on an apartment, villas are growing in demand from investors as opposed to apartments in prime areas such as Downtown, Marina and Palm.
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