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Massive Upsurge in Dubai Realty Sales

Dubai has shown the highest number of sales in the first quarter of 2021 since 2010, according to the data report from Valustrat. The emirate’s real estate market persistently witnessed buoyancy through month by month. It’s been recorded 4,872 transactions valued at AED 11.06 Billion last month of April 2021 in Dubai Land Department bulletins. It was even higher than the previous month March, which was 4,634 transactions that cost AED 10.93 Billion. Total off-plan property sales performance in April has a slight increase compared to March. The weekly report shows the end of April had 1006 real estate transactions amounting to AED 2.04Billion in a total of 722 units, 192 buildings, and 92 lands counted.  The aggregate sum of mortgaged properties in that week was AED 1 billion and the top valuable transaction was AED 205,294,028 worth of an apartment in Al Thaniyah Fifth sold at AED 89,896 per sq. ft value.

Prime areas will continue to show sales increase, says Lynette Abad Sacchetto, director of Research & data. Lynette adds “Investors especially end-users are purchasing properties in all ranges in popular areas, thus, as it continues to see interest and prices are set to increase in the those popular areas as supply is not meeting the demand.” According to Data Finder, comparison between March and April of this year, it presents 3 percent of increase in value and 6 percent rise in the transaction volumes. This is to note another record sales in this year as April alone represents 41 percent in number of transactions and 43 percent of the value of total real estate sales occurred in the first quarter of this year. Saccheto said off-plan transactions has been on the rise through past 3 consecutive months, developers launching new phases for the existing villa/townhouse projects which are most likely to be sold within few hours.

Year to year data explains Q1 2019 average sales value was AED 2.26M while it was considered a normal year, followed by Q1 2020 was AED 2.06M and lastly Q1 2021 is AED 2.12M being top of the chart. The first quarter of this year has shown a major progress in the real estate sales comparing to previous years. 2020 was a tough year though it had a significant amount of sales which was amounted AED 21.33 Billion recorded in property industry data. Tracing back Property Finder data, in the first quarter of the 2019 there were sales total of AED 20 billion with 8,874 in terms of volume in property transactions. Furthermore, there were more than 6000 ready homes sold in the same period of 2021 worth AED 13.5 Billion and AED 5 Billion worth of 3,600 off-plan properties have been sold.

Valustrat data confirms ready homes sales grew 76.1 percent conversely off-plan transactions dropped 30.2 percent. The report further shows comparisons between quarters, ready home sales consistently increased on average of 8.9 percent.  

The median price of apartments sold stood at AED 852 per square foot which was 9.8 percent higher than previous quarter and rose 1.5 percent annually; for villas wise, the median transacted cost is AED 890 per square foot which was as high as 15.3 percent increase quarter on quarter basis. Moreover, 7,294 units were completed in the same period of the year which was already 12% of the projected supply of this year.

There was a 11 percent fall in the rental market last year, however it did not affect the purchasing. Apartment rents dropped 18.4 percent while villas rent increased by 3.9 percent year on year basis. Estimated annual rent cost for 2 bedroom villas is AED 103k, where 3 bedrooms is at AED 150k while 4 bedrooms villa is at AED 212k. For studio apartment the rental per annum is stood at AED 35k, 1 bedroom at AED 52k and 2 bedroom apartment is AED 78k. The data mentions the current Dubai’s residential occupancy is approximately 80 percent.

“2021 Q1 average mortgage application amount was AED 2 Million if we compare it to 2020 Q1 where it was as low as AED 1.3 Million. In January 2021 it hit the all-time record of mortgage for the amount by 2 times. It is partially because of consumer’s interests in buying larger ticket assets” Sacchetto said. It will most likely continue strong on the mortgage world due to a lot of competitive offers, increments, lowest interest rate and lower LTV for first time buyers.

Warren Philliskirk, director at Mortgage Finder, explains “The increase in mortgages volume is because of number of reasons, rather established communities have seen a rise in property prices, then buyers continue their interest in larger properties with larger price tags, also Loan-to-value ration jumped to 5 percent are some of major factors that are encouraging first time buyers to borrow from the bank.

Average value for off-plan properties transactions has risen by 24.6 percent in which secondary market value got increased by 21.5 percent on month-to-month data. In comparison of February 2021 and March 2021, it indicates there is huge surge of 70 percent in total off-plan value also 41 percent increase in total value of secondary real estate market.  

In total sales transactions counted in villas sector in March 2021 topped by Mohamed bin Rashid City with 11.5 percent, Tilal Al Ghaf occupying 10 percent followed by Dubai Hills Estate with 9.9 percent, Nad Al Sheba for 8.2 percent and Rukan representing 5.8 percent.

For apartments segment, Business Bay was the top sales with 10.7 percent, then Dubai Marina having 9.3 percent, followed by Jumeirah Village Circle of 8 percent and Palm Jumeirah representing 7.2 percent of total sales occurred.

Most trending areas in terms of buying for villas in March 2021 were as follows: Arabian Ranches, Dubai Hills Estate, Mohamed Bin Rashid City, Palm Jumeirah and Damac Hills. In account of apartment units popular searches in the same period were Downtown Dubai, Dubai Marina, Business Bay, Palm Jumeirah and Jumeirah Village Circle.