Dubai’s real estate sector is going through an interesting phase of transformation. Effective planning has enabled the city to navigate through the global economic slowdown and strengthen its property sector reforms.
Dubai’s real estate market set a new benchmark, the highest in the last four year by value of real estate sales transactions. The 15th edition of Mo’asher, Dubai’s official sales price index, by Dubai Land Department (DLD), shows that May 2021 had the highest total sales transaction values since March 2017 in excess of Dh11.11 billion, with a growth 1.4 % compared to last April. The number of real estate transactions in May 2021 reached 4,429, bringing the year total, to date, to 20,989 transactions worth Dh47.19 billion.
While the global property real estate sector was battling for its survival in 2020, Dubai’s real estate market was thriving like never before. This was very evident from the number of sales transactions recorded by the Dubai Land Department (DLD). The sector recorded 51,414 transactions worth over Dh 175 billion in 2020 as per the annual transaction report issued by the Dubai Land Department (DLD).
The first quarter of 2021 has come up with more reasons to cherish for the real estate headhonchos. Due to decline in property prices & rental rates, the sector witnessed the highest number of transactions in the last two years.
Let’s take a look at Q1 2021 performance:
Dubai Real Estate Sector: Q1 2021 Performance
The recent bulletin issued by Dubai Land Department (DLD) titled ‘Real Estate Updates Q1 2021’ highlights the sector’s continued positive results in Q1 2021. Real estate transactions reached their highest mark since 2017, registering 6,590 deals valued around AED 22.9 billion, growth in number by 43% and in value by 40% year-on-year.
The real estate transactions in Q1 2021 achieved a phenomenal growth of 27% and 47% compared to Q1 2020 and Q1 2019, respectively. The value of real estate brokerage commissions achieved by active real estate brokers in the real estate market reached AED 392 million in Q1 2021, while 143,374 Ejari contracts were recorded in Q1 2021, 57% of which were new contracts and 43% were renewed contracts.
Dubai’s Skyscrapers are Standing Tall on the Expectations of New Investors:
Despite all market uncertainties, the Dubai real estate sector has not lost its charm. According to the DLD bulletin for Q1, 2021, the sector attracted 5,683 new investors, which was 64% of the total number of investors. The Dubai property market has been highly successful in winning the trust of both local & international investors.
The areas that remained ‘an apple of an eye’ of investors to buy villas in Q1 2021 include – Hadaeq Sheikh Mohammed bin Rashid, Wadi Al Safa 5, Wadi Al Safa 7, Nad Al Sheba 1, and Al Thanyah Fourth, as per the bulletin.
The areas that remained the top choice for apartment sales are –Dubai Marina, Palm Jumeirah, Business Bay, Burj Khalifa, and Al Merkadh were the top choice for apartment sales. 2021 will prove to be more positive for the industry as the demand-supply ratio is heading towards stability and expected to remain relatively resilient to the effects of 2020.
Growth Drivers:
Rising cases of covid-19, strict travel restrictions, lengthy lockdown phase, economic slowdown, and massive business losses due to lack of demand & job losses, were the top reasons for the global investors especially from Europe, India & North America to invest in Dubai real estate market. There has been an enormous rise in the number of affluent investors from Britain, Italy, France, and Germany buying villas and holiday homes in Dubai due to rising cases of coronavirus in their respective nations. Even in the middle of the pandemic in 2020, the Dubai real estate market got a big boost from foreign investors. According to the data posted by Gulf News, in 2020, Dubai’s real estate market attracted 19,757 foreign investors, who concluded 24,666 investments worth over Dh35.6 billion.
The triumph of the UAE real estate sector is also attributed to its visionary national leadership for coming up with business-friendly measures like FDI laws, restoration of relations with Qatar, fastest and well-executed Covid vaccination drive, digitization, reduction of interest rates, Expo 2020, increase in LTV ratios for the first time buyers of the property, long-term residency visas, and launch of golden visa to offer quick pathway to citizenship.
In 2020, Kaizen AMS witnessed many of its prestigious real estate clients coming up with new units as demand for the property increased exponentially. This has positively impacted our business last year. Banking on the favorable business climate, government measures, real estate spending, and rising foreign investments, Kaizen AMS is all set to thrive and expand its client portfolio several folds in 2021.