Sheikhdom’s Philosophy of “Let’s make sure everyone’s vaccinated and keep everything open” allows property sales steady.
From the last month’s data, a record-breaking 90 luxurious properties each worth an average of 10 million dirhams changed hands, right after the previous record of 84 properties had been transferred in March of this year according to Property Monitor statistics. That’s because “Tons of high profile people are coming to the country to buy new homes on the spot with no due diligence time” says a manager at Knight Frank who is in charge of penthouse sales on Palm Jumeirah.
As new waves of Covid infections put strains on nations to lengthen their restrictions, high-end buyers have flooded to Dubai’s property market to find future homes- as it’s being one of few places in the world that is operating normally where people can fly in without quarantine. Since its first reopening, Dubai has declared itself as the world’s pandemic-affable holiday spot.
It’s been witnessed the highest number of sales in the First Quarter of 2021 in 11 years, according to the data from Valustrat. There has been recorded 4,872 transactions valued at AED 11.06 Billion last month of April 2021 in Dubai Land Department bulletins.
Cash buyers urged buying homes for bargain prices in order to flip them for profits and perceived to remain until prices get too high and return gets diminished. The hot luxury market attraction is nothing new to Dubai, as favorable low-interest rates and the availability of massive mansions within the city has been at the core for years.
Apart from these, during its reopening what busts most is there is no mandatory quarantines upon arrival, moreover, visitors and residents are now partying in Dubai’s bustling bars and lounges and relaxing on its beaches, while taking their selfies in the resorts and helicopter pads are stirring in Dubai’s skyline. Although tourist influx rose country’s coronavirus cases in January, UAE fared well during the pandemic with the young population and a high rate of vaccine administrations.
Dubai, known for a global financial center as an oasis in the Middle East, is a favorite destination for high-profile individuals. 43 percent of April’s transactions in Dubai’s property industry were for homeowners in Palm Jumeirah. The majority of buyers on this man-made archipelago include political elites from Nigeria, Lebanon, and Syria and Afghan warlords seeking a safe investment. The rest of the buyers are wealthy individuals from Europe, India, China, and Russia looking for a decent quality of life as the world crisis rages.
The top real estate transaction from March was a waterfront mansion at Palm sold at as high as AED 110 Mil to a Swiss family and another home was sold to an unidentified European man at a whopping AED 105 Mil, which account second and third most expensive residentials ever in Dubai.
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.
Dubai offers plentiful vaccines availability to fulfill the demand- from Sinopharm shot to Pfizer-BioNtech and Astrazeneca from Oxford. If one questions about the efficacy of certain shots only available in particular regions as vaccination distribution is varying everywhere, here in Dubai, once a resident can book an appointment selected from 4 different shots.
In another line, there are Dubai’s new initiatives to lure high profile investors such as retirement visas, remote work visas and “golden” visas. In addition, authorities offer citizenship to distinguished individuals. Also UAE has altered certain strict Islamic rules such as not allowing unmarried couples to live together to enhance the city’s image to more cosmopolitan city.
A resident professor at Washington’s Arab Gulf States Institute, Robert Mogielnicki adds “Dubai is aiming to right path for post-pandemic life which welcomes foreign investors and eventually recover economy faster”.
In January 2021 it hit the all-time record of mortgage for the amount by 2 times. “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. It is partially because of consumer’s interests in buying larger ticket assets” Sacchetto said.
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.
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.
The wealthy are very unlikely not to stand the brunt of the fallout, even if the market’s rapid rise slows down. Nevertheless, the pandemic has been a challenge of a shift to a new era.