Over the past year and a half, Dubai has faced severe swings in the housing market, has broken many price anti-records and at the same time has set many growth records for five, eight and ten years.
In this article, the Emirates.Estate portal will analyze the first half of 2021, describe trends and give examples of prices in the most popular areas of the city.
In this article
State of industry in Q1 2021
Last year 2020 hit the Dubai housing sector hard. New problems have appeared, and the old ones have worsened.
Falling prices over the past year and a half
The influx of people decreased against the background of international movement restrictions, demand fell, and therefore real estate in Dubai fell in price due to an imbalance of supply and demand towards an oversupply of the latter.
Luxury property in Dubai has become record-breaking affordable, sales of large villas and apartments decreased, as well as rent fell in price. For $1 million today, you can buy five times more living space than in London or New York.
On the other hand, off-plan apartments in Dubai, as well as commercial ones, which received a great deal of careful attention from online trading companies, has found a new breath. The latter needed to intensively expand their storage and sorting spaces.
Small-sized flats in Dubai and studios were very popular, because due to numerous layoffs and the transition to remote work, offices were empty, and employees were in a hurry to look for a small area to live and work at reduced rental rates.
Growth signals in Dubai realty market
However, since January 2021, the market has quickly begun to recover in growth.
The government’s success in fighting the pandemic and easing quarantine restrictions has attracted many new foreign investors and expats. 62 % of all investors, more than 8000 people, are completely new players in the market. In addition, tourists interested in buying property in the UAE also began to come to the country.
So, if in Q1 2021 the cost of property in Dubai was relatively stable, luxury housing prices increased from 5 to 10 %. According to the forecasts of the largest analytical agencies, the average prices for the sector will continue to grow slowly but steadily.
At the moment, there are 42,356 houses for sale in Dubai worth about $1 million.
The rental market began to decline due to the influx of buyers who want to buy cheaper apartments in Dubai, but at the same time, rental rates began to rise.
The latter is due to the fact that the current supply of ready-to-rent real estate is growing slowly, while overall market demand is improving in the country. Arab landlords are entitled to aggressively raise property prices in Dubai. This dynamic landscape underscores the crucial role of innovative real estate marketing strategies in navigating the competitive market in Dubai effectively.
Wealthy home buyers rushed to buy a property in Dubai Marina, Downtown Dubai, Arbian Ranches, Palm Jumeirah and Dubai Hills.
Housing statistics and market situation in 2021 in Dubai
In Q1 2021, the market fixed more than 6,300 deals worth more than $2.4 billion, and ready-made real estate for sale in Dubai accounted for 64% of all deals conducted in the emirate.
However, in May of this year, more than 6,100 transactions worth more than $ 2.9 billion were already made. Another 11,000 new foreign investors entered the local market who were focused on investment properties in Dubai.
The average return on investment has also increased, and in different districts of the city these are figures from 4 to 10%.
There was information from Nakheel Properties, which announced about the sale of 217 villas worth more than $218 million by May.
From the end of December 2020 to June 2021, prices increased by 8-10% across the entire sector.
More purchases of property in Dubai, the UAE, worth more than $10 million were made in June 2021.
There are better outlooks that indicate the recovery of the Dubai economy and the estate sector to pre-pandemic levels by 2022.
Mid-2021: Buying and renting apartments in Dubai
Apartments are the major item in the UAE real estate market. Large Arab apartments in Dubai are most profitable to rent out. Small-sized ones also look perfectly, but they attract more people who want to buy a house as a property.
There is also a segment of off-plan real estate in this sector, which can bring incredible profits more than others. Developers rent out more than 60,000 new properties annually, and most of them are apartments for sale in Dubai.
In Q1 2021, over 10,000 housing real estate were provided to new residents. At least another 26,500 flats for sale in Dubai should be implemented by the end of 2021. Of this residential real estate, more than 80% were apartments of various configurations.
At the moment, apartments are starting to steadily become more expensive, as are villas. In relation to Q1 2021, apartment prices in Dubai increased by 1.7%, when considering year-on-year – by 4.8 %.
Apartments are extremely popular in Meydan (15 %), Jumeirah Lake Towers (9.3%), Dubai Marina (8%), Business Bay (6.8%), Dubai Center (6.6%), Mohammed bin Rashid City (6.3%), Jumeirah Village Circle (5.4%), Palm Jumeirah (3.9%).
The increase in prices per sq. m. in these districts ranged from 5 to 7.5 %. The return on investment reached 6-7%.
Mid-2021: Buying and renting villas and townhouses in Dubai
Villas and townhouses are a type of real estate that is mostly preferred to buy rather than rent out. Especially this trend will increase against the background of rising rental costs.
So, only in the first five months of 2021, the rental of villas on Arabian Ranches rose from $33,000 to $48,000, in another popular direction, DAMAC Hills, the rate increased from $24,100 to $33,600.
In June, villas in Green (18.2 %), Mohammed bin Rashid City (11.3 %), Dubai Hills Estate (5.5 %), Arabian Ranches (4.8 %), Akoya (4.5 %), Dubai (4.2 %), City Square (3.2 %) were the most popular areas with buyers who were interested in buying apartments in Dubai near the beach.
The price in the same month achieved 10.3 %, the quarterly growth was 7 %. Villas and townhouses, which occupy only 13% of the housing market in the UAE, are becoming the engine of price growth in this sector. They have already covered the losses in 2020.
In Dubai, the average purchase price of one sq. m. reached $2,720. Arabian Ranches (10.3 %), Jumeirah Islands (9.1%), Dubai Hills (9%), Lakes (8.2%), Mudon (7.7%) and Meadows (7.2%) have shown the largest annual capital gain.
Why it is worth investing in Dubai now
Dubai now has the best conditions for good investments. First of all, this is due to the unique price offers on the housing market, the attention that the government pays to innovative technologies and rapid actions to combat the coronavirus pandemic. The fact that 35,600 deals worth 72 billion dirhams were made against the backdrop of the pandemic in 2020 also made Dubai the most popular destination for smart investments.
In addition, a new citizenship policy to foreign citizens for outstanding services should attract more talented people who will be able to contribute to the development of the state and buy a property in Dubai. It will also have a beneficial impact on the local residential market.
Moreover, it is also expected that the holding of the World Exhibition EXPO-2020, previously introduced pension visas, with a simplified system for receiving 10-year visas, will improve the property sector and attract a lot of investors in 2021. Furthermore, this event will expand the tourist segment — more than 25 million people will visit the country only for the period of the EXPO-2020 exhibition. Besides, the World Exhibition will create new jobs, which also has a favorable effect on the UAE housing market.
Emirates.Estate helps clients buy a real estate in Dubai
If you want to get more detailed information about flat prices in Dubai, as well as practical guidelines, choose the most profitable apartment for yourself — Emirates.Estate has a broad range of services from the specialists in selection of properties and local market analysis. The site staff will always give professional advice, as well as provide full support in the process of making a transaction for buying property in Dubai for foreigners.
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