UAE- The property market in Dubai is raising displaying signs of healthy demand and stabilization with cost raises registered consistently over the last four months showing further evidence that the market bottomed out in late 2020.
For the three months ending February, costs raised 4.6 percent, as per the Property Monitor. The cost recovery gained further momentum in February, with monthly gains of 1.9 percent registered at an emirate-wide level after registering gains of 1.3 percent in January and 1.5 percent in December, and now stand at Dh858 per square foot-back to levels previous registered in July 2012.
“The declines seen month-by-month in 2020 have almost been erased by the recent strong performance, with overall prices decreasing by just over one percent in the year to February,” Property Monitor said in its monthly market report.
“This figure represents a very significant turnaround compared to the prior-year period to February 2020, when a year-on-year decrease of 11.4 percent was recorded,” Zhang Jochinke, COO of Property Monitor, said.
“Based on current trends and reports from brokers of strong demand, Property Monitor predicts that the market will show further growth into the year as the world starts to exit the pandemic and international travel links are restored,” Jochinke added.
“Winners and losers will likely emerge based on the desirability of the location and community. The question will then be whether the current price growth is sustainable if supply is again triggered with new developments and off-plan sales recovery.”
Brokers show strong demand, mainly in the popular places, with a further acceleration in costs now likely as the world exits the pandemic.
The median apartment cost Dh775,000, townhouses at Dh1.539 million, and villas at Dh3.333 million.
Arabian Ranches, Damac Hills, Jumeirah Islands, Mudon, and the Villa have all registered largely consistent monthly cost appreciation over the past three to six months.
For the ninth straight month, deals of finished property dominated off-plan provided the report. Finished property deals accounted for 68.4 percent of deals in February versus only 31.6 percent for off-plan properties.
“The pandemic and ensuing need for space seem to have triggered a sense of urgency among buyers and investors to secure ready properties that offer immediate possession in favorable locations before prices appreciate further,” said the report.
After setting a record-breaking volume of about 3,000 home loans in January – where about 50 percent of home loans occurred on a single day and are believed to have been the outcome of a bulk portfolio of loans – home loans returned to expected levels in February with 1,465 loans registered. Of these, just under 70 percent were bulk home loan deals spread across various projects.
In February, the Dh3 million-Dh5 million costs tier witnessed a market raise in popularity, increasing to 12 percent from 7.7 percent in January. This increase can largely be attributed to the launch of the Harmony Villas in Tilal Al Ghaf, which cost 25 percent of all deals in this tier.
Resale transactions — subsequent sales of a property once purchased from the developer — stood at 49.9 percent of the total market in February, well above the
Resale deals – subsequent deals of a property once purchased from the 12-moth average of 34.9 percent. This steady strengthening of the resale market is a telling sign of a maturing market where end-user and investment demand drives activity rather than speculation.