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Thu, Nov 21, 2024 | Jumada al-Awwal 19, 1446 | DXB
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Worst is over for Dubai real estate market
Dubai - Investors, buyers set to take advantage of price correction in residential properties
- By
- Muzaffar Rizvi
Industry experts said that it is the right time to invest in the property market while tenants should also be ready to pay more towards the end of the year. — File photo
Dubai real estate sector looks set to stage a smart recovery this year due to speedy economic recovery, spending on infrastructure development, growth in trade and tourism sectors from the Abraham Accords, experts say.
Referring to latest data, real estate developers, executives and analysts said investors and end-users are expected to take advantage of property price correction by purchasing villas and apartments in the emirate. They said worst is over for Dubai property market as prices have touched the bottom and will start rebounding this year.
Industry experts said that it is the right time to invest in the property market while tenants should also be ready to pay more towards the end of the year.
Property consultancy ValuStrat, which recently released its annual report, said apartment prices recorded year-on-year decrease of 14.3 per cent last year while villa rates dropped by 13 per cent.
The report noted 18 per cent year-on-year decline in rents for apartments in 2020 but noticed a stability in villa segment as it fell by only one per cent.
Dubai Marina, Business Bay, Town Square, Jumeirah Village and International City remained most sought-after locations for buyers and end-users looking for ready properties.
Investors, who believe in off-plan properties, found Jumeirah Village, Downtown Dubai, Dubai Creek Harbour, Business Bay and Sobha Hartland most popular areas for investment.
Subject to health crisis being resolved, the report said Dubai economy will grow by four per cent this year that will benefit the real estate sector.
“Economic recovery, Expo 2020 and 50-year anniversary of UAE will improve market sentiment this year. As developers put new projects on hold, rentscand capital values in established villa locations could stabilise and perhaps witness a gradual appreciation while apartments may follow the similar suite towards the end of 2021,” according to the report.
Haider Tuaima, head of real estate reserach at property consultancy ValuStrat, said the emirate’s real estate sector will remain a sought-after destination for investors this year.
“The worst is over for Dubai property market and prices will start rebounding this year. Citywide average prices for villas and apartments are expected to see an increase of up to three per cent and one per cent, respectively. Some areas may perform better or worse than others,” Tuaima told Khaleej Times on Saturday.
Citing speedy recovery from the pandemic, quick economic recovery, tight control over new supply, hosting of Expo 2020 and celebrating UAE’s 50th celebrations are some of the key reasons for real estate turnaround, he said property prices have a long way to reach previous peaks.
“Residential areas with good infrastructure, transport links, schools shoos and shops will remain in demand by property buyers and tenants this year,” he said.
To a question, he said property sector may face some short-term challenges but it will not derail the recovery process.
“Pending supply from previous years is expected to come online at some point in time, but improvement in general economy, business growth, and job creation will generate further demand of residential units in the emirate,” Tuaima said.
Imran Farooq, chief executive of Samana Developers, said has a strong belief in Dubai property market as he planned three new residential projects in the emirate.
“We have increased the headcount by 55 per cent for 2021 to double up the sales revenue after registering record sales last year,” Farooq told Khaleej Times on Saturday.
He said Dubai is the investor hot-spot with a positive outlook while its real estate sector has performed well and is capable of fighting with a major pandemic.
“The city has launched a massive Covid-19 vaccine drive to protect the 9.89 million population. The UAE converting the empty hotel apartments into quarantine centres was an innovative idea and helped reduce the spread of coronavirus.
“Dubai has emerged as one of the fastest cities in the world to get over with the pandemic as the UAE’s 12 per cent population has already been given the first dose of the vaccine. Around 80,000 people get shots in a day. This is resulting in economic recovery and growth in tourism,” he said.
About the performance of his company, he said Samana Developers completely sold out its Dhs185 million Greens and Hills projects in 2020.
“We have managed to fast-track the construction by introducing drastic changes in the way construction is done for its 327 units in total. Samana’s new construction management strategy helped complete the construction ahead of time,” he said.
Shazil Imtiaz Rafi, managing director at Rafi Group, said Dubai has a unique real estate development landscape and it will remain an attractive market for investors across the globe.
“The emirate is home to the worlds most iconic real estate development projects. These landmark projects paired with a team of experts in policy making constantly enable improvements in the secondary markets,” he said.
“When the much anticipated Dubai Expo 2020 was announced in 2013, an immediate effect was that Dubai’s real estate developers over supplied the market with new units. Unfortunately, when the Expo 2020 was delayed due to Covid-19 it had an unfortunate effect on both tourism and retail.
“Although recovering from this will take some time, I feel Dubai government has taken effective steps in time to curtail new projects in an attempt to control over supply,” he said. Additonally, he said the government is trying to increase demand by incentivising investors through improving business sentiments by relaxing visa laws to fully revive economic activity in the emirate.
— muzaffarrizvi@khaleejtimes.com
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