KHALEEJ TIMES, Saturday, Aug 14, 2021 | Muharram 5, 1443
Dubai realty stages V-shaped rebound as H1 deal value surges 113pc
Emirates:
Dubai’s residential property sector witnessed
a V-shaped recovery in the first half of 2021 subsequent to a bottom out in
November 2020, a property investment and technology platform said in a research
report.
During the first six months of 2021, Dubai’s residential property market
recorded a 74 per cent increase in overall volume of transactions compared to
the same 2020 period, while the value of property transactions increased by 113
per cent in the same period, analysts at SmartCrowd said in their “Dubai
Residential Property Report.”
Siddiq Farid, CEO and co-founder of SmartCrowd, said a combination of factors
appeared to have strengthened the volume and value of transactions in Dubai
during the first half of this year.
“Government policies to introduce attractive visa and residency schemes for
investors and professionals are starting to bear fruit. Incentives to support
entrepreneurs and the private sector, proactive safety measures to combat
Covid-19, and visionary thinking for events such as Expo 2020, have underpinned
investor appetite for real estate in Dubai. While nothing is guaranteed, we
expect that confidence to continue to grow for the remainder of the year,” said
Farid.
Ready properties drew the most attention from investors with 72 per cent of
overall deals in completed homes as against 28 per cent off-plan. Demand for
ready stock also helped drive per square foot prices for available properties up
by 10 per cent.
“With a lack of new supply in Dubai’s most popular areas and pricing at levels
last seen in 2011, there is positive sentiment in the market and a resultant
boost in demand for existing properties,” said Farid.
Dubai’s villa segment has posted some of the strongest sales performance as
people’s preferences have shifted to larger living spaces, with room for outdoor
activities.
The research shows that the sales average for ready villas in Dubai has
increased by over 19.3 per cent from Dh 758.4 per square foot in H1 2020 to
Dh905.1 per square foot in H1 2021. Similarly, off-plan sales prices of villas
have grown by 9.3 per cent from Dh 684.8 per square foot in H1 2020 to Dh748.4
per square foot in H1 2021. For apartments, ready sales prices have increased by
8.7 per cent year-on-year, while off-plan apartment prices have dropped on
average 9.5 per cent compared to the same period last year.
The report said average off-plan price per square foot took a dip by 3.42 per
cent compared to H1 2020 and attributed it to new supply focusing on affordable
housing segments and thus putting downward pressure on average pricing.
The report also looked more closely at specific areas and segments in Dubai.
Palm Jumeirah has shown a 34 per cent uptick in the value of property
transactions and a 221 per cent increase in volume of transactions, while JLT
saw the highest increase in transaction volume of 262 per cent.
“Dubai is a unique market with some pockets of the city performing better than
others. One of the advantages of investing in real estate via crowdfunding is
diversification of your portfolio – you can spread investment over a number of
areas and follow the overall trend of the market, rather than putting all your
eggs in one basket in a single property,” said Farid.
Farid said crowdfunding properties can help to further stimulate the market and
support developers with their sales efforts. Investor sentiment is returning,
and personal finances are beginning to recover too. “While investing in an
entire property in Dubai might still be out of reach for some, investment via
crowdfunding allows people to take a fraction of a property from as little as
Dh2,000. Crowdfunding in real estate is an accelerating trend and has the
potential to be a major catalyst for the region’s property market.”