Analysts see sentiment shift quite significantly, prices are increasing across the board
Dubai: The property market in Dubai is showing clear signs of recovery, research from UK-based data analytics and consulting Global Data showed, with property developers planning new projects. But how does the buying sentiment currently fare in the region?
“Dubai’s construction sector is showing tentative signs of a long-awaited recovery,” Global Data noted. The city’s real estate sector has not been at its strongest in recent years due to oversupply coupled with the impact of the global economic slowdown.
More projects being planned
The analytics firm further added that government-controlled real estate developers are planning new projects in response to rising property prices buoyed by the emirate’s recovery from the economic impact of the COVID-19 pandemic.
“UAE-based companies such as Nakheel, Emaar, and Damac are in the early stages of planning new projects,” said Colin Foreman, Deputy Editor at Global Data’s business intelligence division MEED.
“These schemes include villa communities and waterfront apartments, two-property classes that continue to perform well with strong demand. Villas are performing well, in particular.”
Apartment blocks in Dubai’s International Media Production Zone. Picture used for illustrative purposes.
Why are people buying?
Analysts have been seeing sentiment shift quite significantly and as a result, prices are increasing across the board now, particularly since March this year.
On the top end of the market, it’s mostly European money from investors seeking assets in dollar-linked economies.
The UAE, of which Dubai is a part, introduced new visas for tourists and approved a new remote work visa that enables employees from all over the world to live and operate from the UAE.
Buying a property is also one of the fastest ways of getting a residency permit in Dubai.
Demand was seen first for high-end homes
World’s wealthiest home buyers have been finding bargains aplenty in Dubai’s luxury real estate, turning March into the busiest month ever for the emirate’s top-end residential properties.
A record 84 properties, each worth Dh10 million or more, changed hands last month, according to data from real estate consultant Property Monitor.
The Middle East’s business and tourism hub provided an additional lure after a property downturn that started six years ago shaved more than a third off values. A luxury apartment for sale in Dubai. Picture used for illustrative purposes.
Prices are now seen rising as a result
On average, home prices climbed 7.5 per cent since November, with gains of 10 per cent to 15 per cent in established and sought-after locations, according to Property Monitor.
Dubai house prices will rise for the first time in six years this year, supported by a swift vaccine rollout that has lifted hopes for overall economic recovery, according to a Reuters poll of property analysts. The high-end market’s momentum has carried through into last month. Dubai has so far seen 69 homes worth Dh10 million or above sold in April for a total of Dh1.36 billion.
“While opportunistic or tactical projects in established locations with proven demand will be the first to be launched, plans are also being considered for strategic projects in newer areas of the emirate: areas such as the Dubai Waterfront and Palm Jebel Ali area on the coast close to the Abu Dhabi border,” Foreman said.
“Although work has begun in these areas before, few established communities exist,” he added. “As Dubai’s center of gravity continues to move south – as a result of the Expo 2020 Dubai site and the Dubai South development – the area could now be ready for development work again.