20 Sept 2021, Khaleej Times – khaleejtimes.com
Villa segment to drive real estate growth in Dubai during the October-December quarter.
Dubai villa segment has a bright outlook and is expected to record up to 50 per cent growth during the fourth quarter as investors and end-users look for best options in areas near to Expo 2020 site, says a latest report.
“Villa segment is expected to drive strong growth in Dubai real estate sector during the fourth quarter as consumer and investor sentiments are up ahead of Expo 2020 Dubai,” according to Zoom Property Insights.
The promising figures reported in the first two quarters of 2021 and the current statistics in the third quarter depict the same pattern that will boost villa sales by up to 50 per cent on quarter-on-quarter basis during the October-December 2021 period, the Dubai-based real estate portal said.
It further said the demand for villas is expected to surge in the areas closer to the six-month long exhibition site.
“Expo 2020 is round the corner and it will lead to positive sentiments in the market. The areas close to the site of Expo 2020 will witness more transactions for villas in Dubai during the fourth quarter as the demand picks up with every passing day,” said Ata Shobeiry, chief executive at Zoom Property.
According to Zoom Property Insights, transactions for 1,400 villas worth Dh3.1 billion and 2,284 villas worth Dh5.4 billion were recorded in Q1 and Q2, respectively. A similar trend is continuing as seen in the rising volume of villas for sale in Dubai, and Q3 is also likely to conclude on a higher note with strong double-digit growth.
“With the mega-event starting from October 1, 2021, the demand for villas can be doubled as compared to the last year,” Ata said in a statement to Khaleej Times.
“Arabian Ranches, Dubailand, Dubai South, Palm Jumeirah, MBR City, Dubai Hills Estate and DAMAC Hills 2 are likely to be prime areas for villa transactions during the fourth quarter as we have received lot of enquiries from the investors and end-users,” he said.
Villas, townhouses in demand
Ayman Youssef, vice-president, Coldwell Banker UAE, said the real estate market has clearly witnessed an upward trend starting second quarter of 2021, especially in the luxury segment.
“The pandemic and remote working situation has led to an emerging post Covid global trend which has people showing strong interest for villas and townhouses. Occupiers are looking and opting for properties with open spaces, green areas, community facilities and additional amenities, and this has been one of the biggest reasons for the increased sale of villas,” he said.
He said areas such as Palm Jumeirah and MBR (Mohammed Bin Rashid) City, in the ultra-luxury segment, and Arabian Ranches and Jumeirah Park, in the high-end category, are among the top communities that had seen a constant increase in demand thereby leading to consecutive increase in prices in Q2 and Q3.
“While Palm Jumeirah and MBR City saw a 18.5 per cent and 10.5 per cent increase in sale price in the last six months, respectively, in Arabian Ranches and Jumeirah Park the sale prices increased by 21.24 per cent and 19.26 per cent, respectively,” Youssef told Khaleej Times on Sunday.
“We are optimistic that the villa market will see a continued strong performance in the final quarter of the year too. Since villa communities comprise less than 20 per cent of the total Dubai residential supply, the low inventory market is bound to support a price increase,” he added.
Up-trend to continue
Moreover, he said the opening of borders, Expo and the most recent introduction of green visas is expected to boost the real estate market in a big way. He said the demand for off-plan sales for villa development will be on the rise and will attract strong investors interest driven by the fear of missing out.
“Even in the rental segment, the villa market has and will see a strong performance and high occupancy,” he said.
In Q4, besides Palm Jumeirah, MBR, Arabian Ranches and Jumeirah Park that will continue to see an increase in demand and prices, the other villas and townhouses communities to look out for are Arabella, Mira, Sidra & Maple to name a few.
“Areas close to the Expo could see a boost in demand in the last quarter. We will see a moderate up-trend till the end of 2021 and we expect a price increase of five to 10 per cent in the villa and townhouse sector in the last quarter. Once the economies open up fully, and travel restrictions ease down, there will be a sharper up-trend from 2022 onwards,” Youssef added.
Rising home spending
Diana Magariu, chief executive of Key One Realty Group, said the demand for villas will continue rising seeing as people are more inclined to spend and invest more on their homes since majority of their time is spent in it. The continuous affordability, easy finance schemes, and low interest rates also makes it easier for tenants to transition into home buyers.
“Whenever there is a new launch of villas in Dubai, they get sold out in a matter of minutes. This proves that despite there being a large supply, the demand for villas do not fall through. The average sales price of villas/townhouses during the pre-pandemic period [Q4 of 2019] was Dh1.8 million and it increased to Dh2.2 million during the pandemic [Q4 of 2020],” Magariu said.
She said the pandemic may have sparked the rise in demand for villas, but it is the change in the way people see their homes and lifestyle choices that sustains it.
“We now prefer to stay in and have whatever we need delivered right to our doorsteps. Enjoying the outdoors can now be done in the vicinity of your own home as we learned how to practice social distancing and safety. I believe this change is now embedded in our minds and is one of the biggest reasons why demand for villas are maintained,” she said.