Did prices in Dubai’s real estate market ‘bottom out’ in November?

16 August 2021, Arabian Business – arabianbusiness.com

New research suggests Dubai property prices have shown a V-shaped recovery since rebounding late last year.

Dubai’s property market bottomed out last November and the first six months of 2021 have confirmed a V-shaped recovery for the sector, according to new research

SmartCrowd, the DFSA-regulated property investment and technology platform, has unveiled the results of its inaugural Dubai Residential Property Report for the first half of 2021.

It said Dubai’s residential property market has seen a 74 percent increase in overall volume of transactions in H1 compared to H1 2020, while the value of property transactions has increased by 113 percent in the same period.

Siddiq Farid (pictured below), CEO and co-founder of SmartCrowd, said: “A combination of factors appears to have strengthened the volume and value of transactions in Dubai during the first half of this year.

“Government policies to introduce attractive visa and residency schemes for investors and professionals are starting to bear fruit, incentives to support entrepreneurs and the private sector, proactive safety measures to combat Covid-19, and visionary thinking for events such as EXPO 2020, have underpinned investor appetite for real estate in Dubai.

“While nothing is guaranteed, we expect that confidence to continue to grow for the remainder of the year,” he added.

According to the report, ready properties commanded the most attention from investors with 72 percent of overall deals against 28 percent for off-plan.

Demand for ready stock also helped drive per square foot prices for available properties up by 10 percent, SmartCrowd added.

However, average off-plan price per square foot took a dip by 3.42 percent compared to H1 2020.

Farid said: “With a lack of new supply in Dubai’s most popular areas and pricing at levels last seen in 2011, there is positive sentiment in the market and a resultant boost in demand for existing properties.”

The report also said that Palm Jumeirah has shown a 34 percent uptick in the value of property transactions and a 221 percent increase in volume of transactions, while JLT saw the highest increase in transaction volume of 262 percent.

Farid added: “Dubai is a unique market with some pockets of the city performing better than others. One of the advantages of investing in real estate via crowdfunding is diversification of your portfolio – you can spread investment over a number of areas and follow the overall trend of the market, rather than putting all your eggs in one basket in a single property.”

Dubai’s villa segment posted some of the strongest sales as people’s preferences have shifted to larger living spaces, with room for outdoor activities.

SmartCrowd research showed that the sales average for ready villas in Dubai has increased by over 19.3 percent to AED905.1 per square foot in H1. Similarly, off-plan sales prices of villas have grown by 9.3 percent to AED748.4 per square foot .

For apartments, ready sales prices have increased by 8.7 percent year-on-year, while off-plan apartment prices have dropped on average 9.5 percent compared to the same period last year.

Farid concluded: “Investor sentiment is returning, and personal finances are beginning to recover too. While investing in an entire property in Dubai might still be out of reach for some, investment via crowdfunding allows people to take a fraction of a property from as little as AED 2,000. Crowdfunding in real estate is an accelerating trend and has the potential to be a major catalyst for the region’s property market.”