First-time realty buyers return to Dubai market
A significant decline in new project launches has helped maintain off-plan sales.
First-time property buyers have entered the Dubai housing market in a significant manner as increased long-term confidence in Dubai, lower mortgage rates, higher loan-to-value ratio and discounted prices have added to market sentiment.
"A significant decline in new project launches has helped maintain off-plan sales numbers at decent levels with a supply reduction, and the volumes are gradually starting to improve as discounted properties and increased long-term confidence in Dubai attract more prospective buyers," said Rabiah Shaikh, principal partner at Square Yards.
"In terms of sizes, upgrades are in vogue. On an average, property prices in Dubai today are 25 per cent to 30 per cent lesser than their peak, so we are seeing buyers who are giving up their leases on existing properties to purchase larger properties in other areas, helped by discounted prices and the fact that a larger asset adds more equity to their portfolios. Simply put, prices are attractive for those who desire more space and more long-term capital value," added Shaikh.
The largest price drops in apartments happened in Discovery Gardens and Motor City, both seeing a drop of over five per cent from the previous quarter, indicating tepid demand. However, places like Greens, Business Bay and Dubai Marina held on to steady pricing with an average of 0.5 to 1 per cent price corrections, presenting a bullet proof investment case to prospective property buyers, who continue to invest in these micro markets.
Khurram Shroff, chairman of IBC Group and Gallery Suites, said: "We are seeing a steady rise in the number of first time buyers, as people move to outright ownership, from rental arrangements. Once again, this is partly due to the fact that people want to share fewer amenities with others, in the wake of the pandemic, and partly because of a lowering of prices. I see long-term resilience in these trends. Had there been a lack of confidence around Dubai's capacity to deal with the after-effects of Covid-19, we may have only witnessed people taking advantage of rent depreciation. The fact that a rise in first time home ownership - already a trend prior to the pandemic - has continued, is testament to the faith that Dubai's residents have in the administration."
Property in Dubai continues to be in demand as residents are moving to more spacious and affordable properties. Factors like abundant supply and wider choices with more amenities are attributed to this trend.
"The outlook has remained stable in Dubai. When you look at the real estate industry worldwide, Dubai remains the safest place to invest in because of how it has been structured. With the continuous efforts of the government of UAE under the leadership of its visionary leaders, Dubai's real estate market has been well-regulated, making it very appealing to investors from across the world, and therefore, converting it into the world of opportunities," said Atif Rahman, director and partner at Danube properties.
"In addition, the lack of other global opportunities is another reason as to why Dubai's real estate market will remain very popular. This city still offers what every investor is looking for no matter the challenges, and no other market would offer anything comparable to it, which makes investment opportunities divert to Dubai."
Covid-19 and its restrictions certainly impacted Dubai's real estate sector and its performance, which lagged when compared to the first half of 2019. However, since restrictions began easing in May 2020, the market picked up and recovered fairly quickly with high monthly transactional growth rates.
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