Dubai realty back in spotlight with deals hitting 10-year high
is back in the spotlight as one of the hottest real estate markets where individuals and investors flock in droves to purchase high-end properties, Betterhomes said on Tuesday.
Releasing its H1 2021 Dubai Real Estate Market Report, the real estate brokerage said that the number of units sold increased by 70 per cent in the first half of 2021 compared to the same period last year and 52 per cent compared to H1 2019. “With an overall positive economic and employment sentiment in Dubai, residents have been investing heavily in the property over the past six months.”
Richard Waind, group managing director, said in the first half of 2021, the Dubai property market saw transaction levels at their highest for over a decade. “Domestically, low interest rates and improving job sentiment, coupled with a focus on the "home" brought on by the pandemic, have led to a surge in demand from residents.”
Internationally, Dubai's Covid-19 response and business-friendly approach have won many admirers, said Waind. “As a result, investors have returned in large numbers, looking to take advantage of both improving capital growth prospects and attractive rental yields, which remain higher than most established markets.”
He said prices would continue on an upward trajectory for the next couple of years with the US Fed reserve indicating that interest rates will remain at their current low levels well into 2022 and the supply of new units peaking and expected to drop from next year.
“However, with rental prices lagging sales prices in many places, we see investor margins are being squeezed, especially in periphery communities with lots of new apartment supply, so I expect we will continue to see some winners and some losers in terms of prices across the market," said Waind.
Transactions and prices in villa communities surged in H1 2021. Villa transactions increased by 167 per cent while townhouse transactions increased by 97 per cent.
At Betterhomes, the number of buyer leads for villas/townhouses jumped by 123 per cent, and the number of villas/townhouses sold increased by 146 per cent. Four-bed villas proved popular in this category with a 26 per cent increase in transactions.
The number of UK buyers increased by 600 per cent in H1 2021 as they jumped from 10th place in H1 2020 to 2nd place in the company's ranking of buyers by nationality, according to Betterhomes data.
Prices increased almost 40 per cent in some communities, like in the Jumeirah Islands, while at the same time reduced in others by over 25 per cent, like in Al Habtoor City and Dubai South, according to Dubai Land Department data. Average property prices per sq.ft. increased by 24 per cent for villas/townhouses and 3.0 per cent for apartments in H1 2021.
The report said the residential leasing market in Dubai has followed a similar trend to sales in H1, with tenant leads and rental transactions up significantly compared to the previous year. Leasing transactions increased by 31 per cent while the number of registered tenants increased by 47 per cent compared to H1 2020 at Betterhomes.
“The desire for outside space and home offices has been a key driver for larger units. Three-bed apartments and villas were particularly in high demand. Many villa communities experienced a sharp decline in rental supply this year as tenants competed to snap up available units, which in turn had pushed prices up,” said the report.
“Rising rental prices in villas and townhouses have not gone unnoticed by investors. Since they typically have lower service charges than apartments, investors went for smaller villas and two or three-bed townhouses with high rental demand and attractive yields. Rental prices of villas followed market trends and increased by 14 per cent, primarily due to a decline in the inventory in certain communities,” said the report.
Source:www.thenationalnews.com
