KHALEEJ TIMES, Wednesday, May 19, 2021 | Shawwal 7, 1442
Investors flock to buy Dubai realty in Ramadan
Emirates:
Dubai’s real estate market continued its upward trend during the holy
month of Ramadan despite reduced working hours as investors flocked to
purchase apartments and villas amid fears of a price increase in the coming
weeks.
The emirate recorded 4,804 property sales worth Dh9.99 billion, the highest
number of transactions during Ramadan. The number of transactions in Ramadan
this year grew by 211 per cent compared to 2020 and 57 per cent compared to
2019, according to data released by Property Finder Group on Tuesday.
Earlier, the emirate recorded the previous highest Ramadan sales in 2015 when it
saw 3,870 property sales transactions and since then the number of transactions
in the holy month have averaged around 2,500 every year. Ramadan 2020, being in
the midst of the pandemic and in the lockdown last year, saw only 1,543 sales
transactions.
“There was always a myth that the real estate market slowed down during Ramadan
and a few years ago we dove into the data and debunked that myth. Ramadan has
proven to be a strong time for real estate sales and as we can see this year the
record breaking trends since the ease in lockdown continued during Ramadan,”
according to Lynnette Abad Sacchetto, director of Research & Data at Property
Finder Group.
Realty bottom out
Imran Farooq, chief executive, Samana Developers, said Dubai market has now
bottomed out, showed it maximum resilience and finally achieved boom.
“This is at the back of excellent handling of Covid-10 crisis, highly successful
country-wide vaccination drive, and commitment of His Highness Shaikh Muhammed
Bin Rashid, Prime Minister of the UAE and Ruler of Dubai, of converting a crisis
into an opportunity,” Farooq told Khaleej
Times.
Historic 4,804 transactions valued at Dh9.99 billion in Ramadan 2021 reflects
Dubai’s attraction as a magnet for investors as soon as Covid-19 related travel
and business restrictions were eased. Samana Developers has been optimistic
about Dubai real estate market has, time and again, been predicting similar
outlook, he said.
“Investors gained from the low trend caused by Covid-19 and invested into future
for higher return on investment when the crisis are over. They have now seen the
results,” he added.
Property prices
picking up
In another positive development on Tuesday, Morgan Stanley also said Dubai
property prices are rising for the first time in six years amid higher demand
and a slowdown of project launches since 2017.
Citing research from consulting firm ValuStrat, the US investment bank said
there was a 1.2 per cent month-on-month rise in residential values in April, the
index’s highest monthly growth rate in seven years.
“Demand for residential real estate has picked up faster than expected, amidst a
wave of government reforms over the past 12 months, attractive mortgage rates,
and a shift in demand patterns due to Covid-19,” according to Morgan Stanley
research note.
Property firms
earnings up
As the property prices are heading towards stability since fourth quarter of
2020, the listed companies have reported better earnings this year.
Emaar Properties recorded an eight per cent growth in net profit to Dh657
million for the first quarter 2021 compared to the net profit of Dh609 million
during the same period in 2020.
Emaar Development posted 20 per cent growth in first-quarter net profit at $213
million as property sales rose two-fold to Dh5.88 billion due to increasing
demand from the investors and end-users in the UAE. Morgan Stanley upgraded
Emaar Development to ‘overweight’ and raised its price target by 37 per cent to
Dh3.7.
Union Properties, another listed Dubai developer, reported profit of Dh5.6
million for the quarter ending March 31, versus a loss of Dh121.9 million a year
ago.
Some developers see recovery taking longer. Damac on Sunday reported a widening
first-quarter loss of Dh189.6 million, versus a loss of Dh106.1 million a year
ago.
“The market is slowly recovering from the effects of the Covid-19 pandemic and
its impact on various industries, particularly travel and tourism. I still
strongly believe that recovery will take at least 12-24 months,” Damac
Properties chairman Hussain Sajwani said in a bourse filing.
Ramadan sales breakup
Out of all the sales that took place this year during Ramadan, 60 per cent of
all transactions were for secondary/ready properties and 40 per cent were for
off-plan properties.
Moreover, the off-plan market transacted 2,019 properties worth a total of
Dh3.09 billion and the secondary market transacted 2,785 properties worth a
total of Dh6.89 billion during the holy month of Ramadan.
In the villas/townhouses sector, 17.3 per cent of all sales in Ramadan 2021 took
place in Mohammed bin Rashid City, followed by Dubai Hills Estate (9.5 per
cent), Dubai Land (8.8 per cent), Nad Al Sheba (4.8 per cent) and Arabian
Ranches 3 (4.4 per cent).
Looking at apartments, 10.1 per cent of all sales transactions took place in
Jumeirah Village Circle followed by Jumeirah Lakes Towers (9.5 per cent), Dubai
Marina (8 per cent), DownTown Dubai (7.1 per cent) and Al Jaddaf (5.9 per cent).
There were four luxury, high valued property sales over Dh50 million that took
place in Ramadan 2021. Three of them were on Palm Jumeirah ranging from Dh70
million to Dh105 million and one of them took place in Emirates Hills valued at
Dh72.3 million.
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