The Dubai property market carried on strengthening in Q1 2021 to register the first annual cost rises since 2015 while showing new and promising markers for growth every month.
In March, with an increase of 1.3% to Dh873 per sqft, realty costs registered the first year-on-year rise since February 2015 while confirming the strong reversal of the falling trend of recent years, as per the Property Monitor.
Deals during March were at a 10-year more as strong market growth carried on, Property Monitor monthly market report provided.
“The last time rates were at this level was in October-November 2012 during the previous cycle, prices went on to rise for a further two years. The latest reading marks a considerable sea-change in market sentiment and performance compared to March 2020 when a year-on-year decrease of 9.8 percent was recorded,” said the report.
“With a fifth continuous month of gains, Dubai’s price recovery is well underway though not uniformly spread across communities. Villa and townhouse communities have particularly emerged as hot spots with a further acceleration in prices expected over the coming months. Newer communities have joined the established locations as the preferred options for buyers with many also opting for turnkey houses in the absence of finding homes where they can renovate as per their requirement. Further, the encouraging data on transactions is a strong and reliable sign of a buoyant market and contradicts concerns about oversupply and a shrinking population impacting real estate demand,” said Zhann Jochinke, chief operating officer, Property Monitor.
PNC Menon, chairman of Sobha Realty Group, said the buoyancy in the property market is “a testament to Dubai’s economic resilience and its ever-growing attraction as a global residential destination of the rich and famous people. The worst is behind us as Dubai property has started steadily regaining investors’ trust.”
John Lyons, managing director, Espace, provided that his company had a record-breaking quarter where it sold 63% more properties than the year-ago period, with a 115% rise in our income.
“The percentage increase in value terms was greater than volume terms because we transacted at much higher values than in previous years. For example, in Q1 2020, only 7.0 percent of our transactions were above the Dh5 million mortgage cap threshold but in Q1 2021, 30 percent of our transactions were above this threshold,” he said.
“There is an unquestionable resurgence in Dubai’s luxury residential market, with a significant increase in equity, specifically flowing into high-value villas in prime locations. We have sold a significant number of properties above Dh20 million,” said Lyons.
In value terms, a record deal for villa N100 on Palm Jumeirah was recorded at Dh111.25 million on 8 March 2021. In 2015, Villa D106, spread over three plots on the D Frond on Palm Jumeirah, had been sold for Dh185 million.
Another pattern saw during the primary quarter was a pickup in demand for off-plan properties. In any case, on a market share basis, interest for off-plan is intensely exceeded by finished properties. Title deed exchanges represented 63.2 percent of all exchanges in March.
“However, at 1,691 transactions, March marks the strongest month on a volume basis for the off-plan segment since September 2020 when 1,778 transactions were recorded. With new launches now gradually resuming, it remains to be seen if and when the scales will tip in favor of off-plan deals again,” said the report.
In March, the high-end price tiers, containing properties more than a million, witnessed a collective rise in interest of 2.4% month-on-month, securing their highest market share for high-end deals since 2016. Mainly the Dh10 million-plus cost tier increased 66.7% month-on-month and touched a historic high of 1.5% of the total market share.