The supply of new residential units in Dubai is staying strong even during the Covid-19 pandemic with about 10,500 residential units launched in Dubai during the Q1 of 2021.
As per an examination by real estate consultancy Core, an extra 26,500 units are required to be given over in the rest of the year, taking the complete yearly forecast for 2021 at more than 37,000 units.
Prathyusha Gurrapu, head of research and advisory at Core, said despite the initial period of uncertainty and in opposition to more extensive held convictions this time a year ago, the UAE real estate sector and the general economy have fared astonishingly well, because of strong government measures, financial motivators, social changes and perhaps the most elevated pace of inoculations worldwide.
“Dubai’s successful demonstration of mitigating Covid-19 and being open, relatively safer, and connected is supporting new and existing businesses and providing comfort to end-users and investors, resulting in a rise in market activity across all sectors, particularly over Q1 2021,” said Gurrapu.
Transactions
She said there has been a 64% rise in secondary market deal activity over the first quarter of 2021 in comparison to the first quarter of 2020.
Investigating the data intently, the villa market fundamentally outperformed with a spike of more than 137%, while apartments saw over a 41% expansion in secondary market exchange action over Q1 2021 contrasted with Q1 2020. On the other hand, off-plan market action keeps on confronting headwinds, shrinking by 29% over a similar period.
“Despite Covid-19 led market challenges, we are seeing a robust increase in residential secondary sales transactions in Q1 2021. A multitude of demand drivers are resulting in this increase, including competitive entry points, variety of options, change in loan-to-value ratios, low-interest rates, visa reforms, an economic environment of safety and openness, and the need for occupiers to upgrade residences to accommodate Covid led lifestyle changes,” she said.
Gurrapu called attention to that the market is seeing adjustments in average villa deal values with costs showing supported marginal upticks interestingly since 2014.
Rents
Gurrapu said the captivated deals execution among apartment and villa districts is being reflected in the rental market. A slow yet consistent uptick in villa rental qualities can be seen from Q4 2020, although the year-on-year esteems are as yet down two percent.
“The prime villa districts of Palm Jumeirah and Emirates Hills buck the trend with 12 percent and 11 percent year-on-year increases while the affordable districts of Jumeirah Village Circle and Dubailand saw the sharpest decline in rents at -11 percent and -9 percent respectively. The trend of widespread rental contraction- in apartment districts lingers on with most districts witnessing sharp double-digit year-on-year declines,” she added.