KHALEEJ TIMES, Wednesday, May 5, 2021 | Ramadan 23, 1442
Supply of new residential units stays strong in Q1 at 10,500
Emirates:
Supply of new residential units in Dubai is going strong even during the
Covid-19 pandemic with nearly 10,500 residential units handed over in Dubai
during the first quarter 2021.
According to a study by real estate consultancy Core, an additional 26,500 units
are expected to be handed over in the remainder of the year, taking total annual
forecast for 2021 at over 37,000 units.
Prathyusha Gurrapu, head of research and advisory at Core, said despite the
initial period of uncertainty and contrary to wider held beliefs this time last
year, the UAE real estate sector and the overall economy have fared impressively
well, thanks to robust government measures, fiscal incentives, social reforms
and one of the highest rates of vaccinations globally.
“Dubai’s successful demonstration of mitigating Covid-19 and being open,
relatively safer and connected is supporting new and existing businesses and
providing comfort to end-users and investors, resulting in a rise in market
activity across all sectors, particularly over Q1 2021,” said Gurrapu.
Transactions
She said there has been a 64 per cent increase in secondary market transaction
activity over Q1 2021 compared to Q1 2020.
Looking into the data closely, the villa market significantly outperformed with
a spike of over 137 per cent, while apartments saw over a 41 per cent increase
in secondary market transaction activity over Q1 2021 compared to Q1 2020. On
the other hand, off-plan market activity continues to face headwinds,
contracting by 29 per cent over the same period.
“Despite Covid-19 led market challenges, we are seeing a robust increase in
residential secondary sales transactions in Q1 2021. A multitude of demand
drivers are resulting in this increase, including competitive entry points,
variety of options, change in loan-to-value ratios, low interest rates, visa
reforms, an economic environment of safety and openness and the need for
occupiers to upgrade residences to accommodate Covid led lifestyle changes,” she
said.
Gurrapu pointed out that the market is seeing stabilisation in average villa
sales values with prices showing sustained marginal upticks for the first time
since 2014.
Rents
Gurrapu said the polarised sales performance between apartment and villa
districts is being mirrored in the rental market. A slow yet steady uptick in
villa rental values can be seen from Q4 2020, although the year-on-year values
are still down two per cent.
“The prime villa districts of Palm Jumeirah and Emirates Hills buck the trend
with 12 per cent and 11 per cent year-on-year increases while the affordable
districts of Jumeirah Village Circle and Dubailand saw the sharpest decline in
rents at -11 per cent and -9 per cent respectively. The trend of widespread
rental contraction- in apartment districts lingers on with most districts
witnessing sharp double-digit year on year declines,” she added,
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