Time to buy? Dubai property sales on an upswing, despite Covid-19 woes

Dubai - Demand for mid-to-high housing market grows amid the pandemic

Dubai has been registering an uptick in property sales transactions in the last six months.

Secondary, ready villas, and townhouses are in high demand as per Dubai Land Department. But it is not just the ‘glut’ in the market that is driving this upswing.

The prices, too, are reporting an upward trend for the last six months. The rising interest in the mid-to-high housing market reflects a paradigm shift in mindset brought about by the pandemic, say experts.

“Yes, people are buying and are leaning towards townhouses and villas. They want to own a private space that allows less interaction with other people,” says Babar Ali, Sales Director, Homesmith Estate Brokers.

Shiv Gupta, co-founder, mymoneysouq.com, echoes similar sentiments. “The novel coronavirus disease (Covid-19) pandemic forced digitisation on us. It imposed a change where our homes are no longer just a sanctuary for relaxation but double up as office space, too. So, people are looking for bigger spaces, even if they are a little far off from work or city centres. They don’t mind longer commutes to work, which in most cases have been reduced to once or twice a week or less, for a space that is more comfortable.”

And while families and individuals look for bigger adobes, the interest invariably has been more in communities. “Gated communities have been of much interest in Dubai in the last six-eight months. This applies to both for rentals and sale. More and more families are appreciating the lifestyle that they can afford in a community with parks, walkways, organised commercial spaces like malls, etc., in community living as opposed to living in a standalone building,” says Farooq Syed, chief executive officer (CEO), Springfield Properties.

Springfield Properties have seen a trend of people moving from Barsha, Dubai Sports City and Jumeirah Village Circle (JVC) to communities such as Town Square, Mudon, Dubai Hills. “Prime real estate is selling at a premium right now, and in this sector, villas and townhouses have done phenomenally well,” adds Syed.

Besides the exclusivity, there are certain aspects of the economics of homeownership that also work in the favour of villas and townhouses.

Service charges, for instance, which are paid by owners on an annual basis are much more reasonable in villas and townhouses. “Villa owners, in most communities, usually a fifth of what owners of an apartment would pay. Service charge for a three- bedroom house villa in Springs is around Dh6,500. Comparatively, a three-bedroom in Marina attracts a service charge of Dh20,000-Dh25,000,” says Ali.

Prices have bottomed out

Prices have bottomed out, at least in the mid-to-high and luxurious sectors. Lower down payments, a dip in interest rates, improved loan to value ratio, and Dubai’s image of a safe haven for investments are largely the reasons for the uptick in demand and prices in this segment.

“Uber luxurious properties have seen a spike in demand, thanks to European buyers. Since the opening of Dubai in July, we’ve seen quite a few high net-worth transactions,” says Syed.