Real Estate Buyers have flocked to Dubai in recent months, getting the benefit of decade-low prices, simple financing, and an economy back in business despite the epidemic.
Luxury villas, sea-view flats, and second-hand family homes have all seen an increase in sales, reviving a property market that had seen a significant drop in activity during the epidemic and had been in a five-year downturn before that. However, with rents still dropping and oversupply impacting one of the emirate’s major economic engines, the path to recovery will be lengthy.
The Adverse Impact of Covid-19 on Real Estate Market
Table of Contents
The COVID-19 epidemic last year wreaked havoc on Dubai’s economy, which is dependent on commerce, tourism, and its worldwide image as a regional center for commercial services. As a result, businesses cut employment. Many foreign employees, who were required to keep up with demand in a sector that generated 7.2 percent of GDP in 2019, have departed.
However, once the lockdowns and curfews were removed, market activity stepped up in the past six months, according to estate agents, helping to stabilize prices for family villas or luxurious beach and golf course homes.
Realtor Matthew Bate, whose firm Nest specializes in high-end villas, says business has picked up in recent months as citizens, locals, and foreign tourists have taken advantage of the chance to purchase.
“Coming out of the COVID-19 lockout, we had some distressed assets. “Right now, I’d say we’re back up to early 2020, early 2019 prices,” he added.
How Dubai Tries to Stabilize The Market
While most of the globe imposed new coronavirus limitations during the winter tourist season, Dubai welcomed tourists and launched one of the world’s most rapid immunization programs.
“We had a massive inflow of visitors… it brought a lot of people to Dubai. The last couple of customers we had, who was dealing with properties worth more than 15 million AED ($4.08 million), owned homes in New York, London, and are now looking at Dubai,” he added.
Even though prices of more fabulous villas have stabilized, apartment prices in the emirate as a whole were still dropping in February, according to a ValuStrat pricing index.
According to Sapna Jagtiani as an S&P credit analyst, Dubai’s real estate market would not return to the levels before the pandemic happens until next year.
“Prices are down 40% to 50% from their high in 2014, which is why we believe a price recovery to comparable levels would be difficult and long,” she added.
According to Jagtiani, rent prices at the end of 2020 will be approximately 5-10% cheaper than they were at the market’s previous bottom a decade ago.
Rush In The Villa Purchase
According to Lynette Abad of Property Finder Community, a real estate search portal, cheap costs, easygoing mortgage conditions, and a desire for more comfortable properties as the pandemic prompted people to work from home. Resale market sales results Dubai have reached new highs each month since September.
The domination of secondary home trades in Dubai is a significant market change. New project sales dominated off-plan sales, but many developers delayed or stopped new projects last year. Last April, sources told Reuters that Emaar Properties’ Dubai Creek Harbour, a premium waterfront development with 200,000 apartments, was one of them.