From the start of 2021, Dubai’s real estate market has performed with increasing speed and growth; DLD reports that the first quarter of the year saw a 15% increase in sales transactions compared to Q1 2020, and May 2021 outperformed May 2020 by a whopping 197% with 6,021 property transactions valued at AED 21.8 billion.
The luxury property sector has been particularly active, with a newfound influx of European investors seeking beachfront holiday homes to escape to while their native countries face ongoing Covid-19 restrictions and unreliable regulations. The UAE’s swift and efficient response to the pandemic, as well as its creation of new visa schemes, reflected the country’s meticulous protocols, preparation and resilience, and led to eased regulations that allow residents and economic freedom to thrive. The escalation in holidaymakers and new homeowners sparked an interest in overseas investors, who have greatly contributed to the city’s property sales transaction volume.
Considering that 2020 had a total number of 35,041 sales transactions worth AED 71.87 billion, and 2021 has already hit more than 27,373 sales transactions worth over AED 61.97 billion, it’s no surprise that market analysts country-wide predict that the rest of the year will continue to garner increasing confidence in the market internationally.
A notable trend we’ve seen develop since the fourth quarter of 2020 is a surge in villa prices for rentals and sales; the leading consultant group, ValuStrat, measured Dubai’s average transacted price per square foot as higher than AED 1,000 for the first time in three years. Apartment prices, particularly in the rental sector, have maintained a much more stable fluctuation, which indicates that demand weighs heavier on properties with more indoor and outdoor space since the pandemic began.
The heightened demand could also have been instigated by the dip in property prices experienced in the second quarter of 2020, which reached a substantial low after gradually declining over the previous six years. This, along with a motivated desire for larger living spaces and country-wide remote work-from-home arrangement, drove demand to the sudden incline we are still experiencing today.
Dubai’s property market continues to demonstrate steady levels of growth that are forecast to continue through the entire year. The government has been instrumental in implementing fiscal stimulus measures and policy reforms to secure its residents and businesses’ safety during the pandemic and the results speak for themselves--the fear of a prolonged rise in rental prices dissipated entirely once the government announced the three-year rental freeze law being drafted. The UAE’s leaders reacted strategically and reliably through unfavorable economic fluctuations amidst the pandemic, and the results are remarkable. The Central Bank forecast real total GDP growth of 2.4% this year, and market analysts throughout the country anticipate both demand and supply in the real estate market to maintain the same momentum, with an added boost from Expo 2020.