First of all, I hope you are all healthy and coming together in these trying times, in this report, as always I will give an honest overview of where the market stands today with facts and the odd opinion/advice.
Nothing is predictable at the moment and we can speculate as much as we want, many investors have seen a drop-in price and ROI’s from the past years but Dubai still remains one of the most profitable countries to invest in real estate throughout the world.
I have witnessed a few posts from Investors who say their portfolio worth has dropped by 50% since purchase 10 years ago but its not just property value that you need to take into account. Dubai has one of the highest ROI. example: if you purchased a property in 2008 for AED1,000,000, at this time rentals for the same apartment would have been around AED70,000 with service charges circa AED15,000 – this would have made the investor on average over AED500,000 in income (taking into account rental price decreases) so whilst the property price for the said unit may now be valued at AED650,000 the investment is still in the black by AED150,000.
In addition to the above we were always going to have a slow/steady market in 2020-2023 due to the amount of supply resulting from multiple off plan sales in 2014-2016 – and with the obvious economy struggles around the world this has been even more challangiing.
But, as the good old saying, every cloud has a silver lining for multiple reasons.
Positives that have come out of 2020 so far..
40,000 villas and townhouses being handed over throughout the year are now in high demand and being leased faster than we can put online due to lockdown blues of wanting more outside space – with the addition of more supply they have also became more affordable for tenants whilst giving the investor an immediate income
Rental prices have dropped due to supply and companies like http://www.gourban.com have created ways to expedite a more smoother tenant and landlord journey by eliminating cheques, monthly payments, zero penalty contracts and taking the process online which results in less commission required for the tenants to pay
The secondary market has peaked with a increase in sales from 2019 with residents moving towards owning as opposed to leasing
2019 v 2020:
July 2019 – Sept 2019
Combined Apartment and Villa/Townhouse Transactions 8,934
Off plan Registrations – Total 5,311 – of which 3,962 were apartments and 1,349 were villa/townhouses
Sales under AED1,000,000 – 2,131 properties
Secondary Registrations – Total 3,623 – of which 2,660 were apartments and 963 were villa/townhouses
Sales under AED1,000,000 – 1,766 properties
July 2020 – Sept 2020
Combined Apartment and Villa/Townhouse Transactions – 5,414 – 39% decrease
Off plan Registrations – Total 1,696 – of which 1,396 were apartments and 300 were villa/townhouses – 68% decrease, considerably lower due to developers not releasing new projects in the past 12 months
Sales under AED1,000,000 – 918 properties
Secondary Registrations – Total 3,718 – of which 2,334 were apartments and 1,384 were villa/townhouses – 3% increase
Sales under AED1,000,000 – 1,662 properties
Buyers Current Search Behaviour May – Sept 2020
Top searched areas in order – Dubai Marina, Palm Jumeirah, Downtown, Dubai Hills Estate, Arabian Ranches, JVC, Business Bay, JBR
By Bedrooms Apartments and Villa/Townhouses
14% 3 bedrooms, 13% 2 bedrooms, 9% 1 bedrooms, 3% Studios – 44% no selection
Top Searched Key Words
In order – upgraded, furnished, pool, payment plan, sea view, private pool, rented, corner, brand new
Tenants Current Search Behaviour May – Sept 2020
Top searched areas in order – Dubai Marina, Downtown Dubai, Palm Jumeirah, JVC, Business Bay, Jumeirah Lake Towers, Dubai Hills Estate, Dubai Silicon Oasis, Jumeirah, Al Barsha
By Bedrooms Apartments and Villa/Townhouses
18% 2 bedrooms, 16% 1 bedrooms, 13% 3 bedrooms, 6% 4 bedrooms, 5.5% studios – 40% not selected
Top Searched Key Words
In order – chiller free, pool, upgraded, brand new, new, private pool, garden, sea view, balcony, modern
Thank you for reading, stay safe and get in touch if you are looking for assistance of advice.
Laura V Adams
Data from propertymonitor and datafinder