According to realty experts, the residential property market has been buoyant and it most likely to continue on this track for this year
Dubai’s real estate sector continued to show buoyancy in March 2021 by registering a big upswing in sales transactions to 4,643 worth Dh10.93 billion.
According to realty experts, the residential property market has been buoyant and it most likely to continue on this track for this year.
“Investors and end-users are buying properties across the spectrum, from affordable apartments to luxury villas. The popular, prime areas will continue to see activity and prices will most likely continue to rise in these areas due to lack of supply and high demand,” said Lynnette Abad Sacchetto, director of Research & Data.
Compared to February, March data represents a 22 per cent surge in terms of volume and 47 per cent more in terms of value, according to Data Finder, the real estate insights and data platform under the Property Finder Group.
March 2021 also had the highest number of secondary/ready properties transacted in a single month since June 2015, it said.
In the first quarter 2021, the sector recorded 11,757 transactions worth Dh25.15 billion.
“In total, Q1 2021 had 6.0 per cent more real estate transactions than Q4 2020, 16 per cent more transactions for secondary properties and 7.0 per cent less transactions for off-plan properties,” said the Data Finder report.
When compared to Q1 2020, Q1 2021 had 15 per cent more total transactions, 70 per cent more transactions for secondary properties and 29 per cent less transactions for off-plan properties.
The first quarter 2021 has shown a significant growth in sales transaction compared to the first quarter of the previous two years. While in 2020, considered an abnormal pandemic year, 10,101 sales transactions worth a total of Dh21.33 billion were recorded, in the same period 2019, there were 8,874 sales transactions with a total of Dh20.022 billion, additional data from Property Finder shows.
Sacchetto said the increase in the number of transactions for off-plan has been 30 per cent for the past two months which is showing a huge growth in investor sentiment and positive market outlook. “We have seen developers launch new phases within their existing projects, especially in the villa/townhouse segment, which have sold out within hours. People, end users and investors alike, are once again heavily investing in the future of Dubai.”
The average transaction value in Q1 2020 was Dh2.06 million while in Q1 2021 it was Dh2.12 million. In Q1 2019, considered a normal year, it was Dh2.26 million.
“Over the last few months, we have seen prices increase in popular, prime areas due to lack of supply and very high demand while sale prices have stabilized in majority of the areas in Dubai,” said Sacchetto.
“As we have seen in Q1 2021, the average mortgage application has risen to Dh2.0 million compared to the average of Dh1.3 million in Q1 2020, which is partially due to prices increasing along with consumers buying larger ticket properties. In January 2021, we broke all-time records for the amount of mortgages by two times. We are most likely going to see the mortgage market continue strong due to the lower LTV for first time home buyers, competitive offers and the lowest interest rates ever offered,” Sacchetto said.
“This increase in loan amount is due to a number of factors, including the increase in property prices seen in some more established communities, buyers continuing to opt for villa purchases or larger properties in general and also the 5.0 per cent increase in loan-to-values making it possible for first time buyers to borrow more,” explained Warren Philliskirk, director at Mortgage Finder.
The market will also most likely continue to see an increase in appetite for the off-plan sector as developers launch new phases within existing projects, especially in the villa/townhouse segment.
In March, 63 per cent of all transactions were for secondary/ready properties and 37 per cent were for off-plan properties. “When we look at the volume of transactions, the off-plan market transacted 1,713 properties worth a total of Dh2.91 billion and the secondary market transacted 2,930 properties worth a total of Dh8.02 billion,” said Sacchetto.
The number of off-plan transactions in March increased by 37 per cent while the secondary/ready property transactions increased by 16 per cent compared to February.
An interesting factor is that the average transaction value for off-plan properties has increased month-on-month by 24.6 per cent and for secondary properties it increased by 21.5 per cent. The total value of off-plan properties when comparing March 2021 to February 2021 has increased by 70 per cent and secondary properties have increased by 41 per cent, said the report.
In the villas/townhouses sector, 11.5 per cent of all sales in March 2021 took place in Mohammed bin Rashid City, followed by Tilal Al Ghaf (10.1 per cent), Dubai Hills Estate (9.9 percent), Nad Al Sheba (8.2 percent) and Rukan (5.8 percent). Looking at apartments, 10.7 per cent of all sales transactions took place in Business Bay followed by Dubai Marina (9.3 per cent), Jumeirah Village Circle (8.0 per cent), Jumeirah Lakes Towers (7.6 per cent) and Palm Jumeirah (7.2 per cent).
The top areas of interest in terms of searches for villas/townhouses in March 2021 were Dubai Hills Estate, Arabian Ranches, Palm Jumeirah, Mohamed bin Rashid City and Damac Hills. As for apartments for the same period, the top areas of interest were Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay and Jumeirah Village Circle.