The UAE's real estate market has seen a remarkable recovery, with property transactions performing at pre-Covid-19 levels, and exceeding 2020 in Q1 2021, turning it into the busiest ever period for residential properties. Despite the slowdown due to Covid-19, real estate - one of the main contributors to the economic engine of the country - is gaining traction.
The confidence in the country's real estate market from international investors is evident as March witnessed the highest recorded number of home sales transactions since 2010 for Dubai alone, many of these sales included big-ticket residences. According to Bloomberg, a record 84 properties, each worth Dh10 million ($2.7 million) or more, changed hands in Dubai in March, with average home prices increasing over seven per cent. We expect real estate to get stabilised and prices to grow in 2021.
The sales of modern villas, larger family homes, and luxurious apartments have jumped in recent times because of the changing lifestyle and routines due to the pandemic. Buyers are taking into consideration a comprehensive approach to see the quality of life that a property can offer. With people working from home, home offices and all-inclusive homes are also becoming essential features that buyers are looking for in making decisions on property.
Bigger, private family homes in demand
In the post-Covid-19 period, end-users are mostly opting for completely private space for their families. Investors are also attracted towards acquiring land and building customised villas, which ultimately yield good returns to them on sale. The government's initiatives during and post-Covid-19 period, such as granting citizenship and long residency to investors and special talents and post-retirement life, have worked in favour of the increase in real estate sales. This, coupled with the Dubai Urban Plan 2040 - which aims at making the city the best place in the world for living and working - have acted as catalysts stimulating the real estate sales in the first quarter of the year, which saw an increase in the average transaction price for individual villas and homes by 13.7 per cent compared to last year.
Beyond four walls: Details driving the demand
Health-focused developments offering green spaces and amenities like running and cycling tracks, health clubs and kids play areas are garnering more interest from home buyers and investors. Luxury home buyers are looking for authenticity and quality-of-life upgrades, and the focus is on space, privacy and safety. We see a higher concern towards the community's cleanliness and sanitation, and whether the elevators and doors have the latest touchless AI functions, all accumulating as major factors affecting the purchase.
Recent studies indicate that about half of UAE businesses expect remote working to continue in the future. Having a separate space for business meetings and office work is slowly becoming a necessary feature. Most developers are realising this and designing premium properties with guest lounges and private offices.
Everything at home
Luxury property buyers and tenants are looking for homes that offer everything under one roof. Home gyms and cinemas are in high demand with facilities that allow comfortable working space for parents and remote-learning setups for children. The rise of online streaming coupled with ample time spent indoors have made basement theatres and entertainment rooms a prime feature for luxury properties.
2021 and beyond
In my opinion, people will continue to focus on moving to villa communities. There is no looking back for the Dubai real estate market. Being the busiest transition spot globally, Dubai is continuously striving to offer a flexible and the best quality of life to its residents. The government's efforts such as the massive Covid-19 vaccination drive, citizenship/long residency and remote working visas, Expo 2020, 100 per cent foreign ownership of select businesses, and the flexibility of various banks for decreased interest rates on mortgages have stimulated robust real estate growth. Besides, many developers are designing easy payment plans and a lot more. For new home buyers and existing homeowners, Dubai will continue to be a qualitative hub for exploring new opportunities and a great place to live and work.
Kundan Chaudhary is the Founder and CEO of Stones International Real Estate