In a report, a property investment and technology platform said Dubai’s residential property sector underwent a V-shaped recovery in the first half of 2021 after bottoming out in November 2020.
Dubai’s residential property market saw 74 percent more transactions in 2021 than in the same period of 2020, while the value of transactions increased by 113 percent, Smart Crowd analysts said in their, “Dubai Residential Property Report.”.
As reported by SmartCrowd’s CEO and co-founder Siddiq Farid, a combination of factors in Dubai supported the value and volume of transactions during the first half of 2021.
“Government policies to introduce attractive visa and residency schemes for investors and professionals are starting to bear fruit. Incentives to support entrepreneurs and the private sector, proactive safety measures to combat Covid-19, and visionary thinking for events such as Expo 2020, have underpinned investor appetite for real estate in Dubai. While nothing is guaranteed, we expect that confidence to continue to grow for the remainder of the year,” said Farid.
Investors showed the most interest in ready-to-move properties, with 72 percent of deals involving completed homes, compared to 28 percent for off-plan properties. The demand for ready stock also contributed to the 10 percent increase in per square foot prices for available properties.
“With a lack of new supply in Dubai’s most popular areas and pricing at levels last seen in 2011, there is a positive sentiment in the market and a resultant boost in demand for existing properties,” said Farid.
Due to a shift in consumer preferences, the villa segment posted some of Dubai’s strongest sales performance as people prefer living areas that feature outdoor activities.
As the research shows, the average sales price of ready villas in Dubai has risen from Dh758.4 per square foot in H1 2020 to Dh905.1 per square foot in H1 2021, an increase of more than 19.3 percent. Also, off-plan villa prices increased by 9.3 percent from Dh 684.8 per square foot in H1 2020 to Dh748.4 per square foot in H1 2021. For apartments, ready sales prices have risen by 8.7 percent year-over-year, while off-plan apartment prices have dropped on average by 9.5 percent in comparison with last year.
According to the report, the average off-plan price per square foot fell by 3.42 percent compared to H1 2020. The report explained that new supply focused on affordable housing segments led to a reduction in average prices.
“Dubai is a unique market with some pockets of the city performing better than others. One of the advantages of investing in real estate via crowdfunding is diversification of your portfolio – you can spread the investment over a number of areas and follow the overall trend of the market, rather than putting all your eggs in one basket in a single property,” said Farid.
The price of crowdfunding properties can help stimulate the market and boost developers’ sales efforts, Farid said. Investor sentiment is improving, and personal finances are beginning to improve as well. “While investing in an entire property in Dubai might still be out of reach for some, investment via crowdfunding allows people to take a fraction of a property from as little as Dh2,000. Crowdfunding in real estate is an accelerating trend and has the potential to be a major catalyst for the region’s property market.”
