First-time buyers of property are entering the housing market in Dubai in greater numbers. Growing long-term market confidence, lower rates for mortgages and higher LTV (loan to value) ratio are factors enhancing market sentiments along with discounted and lower prices. The principal partner at Square Yards, Rabiah Shaikh, stated that a major decline in new launches has enabled maintenance of decent off-plan sales figures with reduction in supply as well. Shaikh added that volumes are steadily going up with more people getting attracted to the Dubai market and discounted prices.
Shaikh also added that more people are upgrading their properties with average prices being 25-30% lower than peak levels. Buyers are giving up existing property leases for buying bigger units in other localities owing to lower rates and also for adding greater value to their portfolios. Prices are now quite attractive for people desirous of higher space and enhanced capital value in the long term. Apartment prices have sizably come down in areas like Motor City and Discovery Gardens, witnessing 5% reductions from the earlier quarter. Areas like Business Bay, Greens, Dubai Marina and others had steady price points with corrections hovering at 0.5-1%.
Several experts have opined that a steady rise is observed in first-time buyer volumes with several people switching to direct home ownership from rentals. This is because more people want to stop sharing amenities with others after the coronavirus pandemic and also because of lower market rates. There is more confidence amongst people in the ability of Dubai to handle the aftermath of the pandemic. The overall real estate outlook continues to be quite stable with Dubai being the safest investment destination globally owing to several factors. With the UAE Government taking continual measures to improve infrastructure and boost business, the realty sector has been regulated efficiently. This makes it more appealing for investors throughout the globe.
Lack of other investment opportunities globally is another factor behind the continuing popularity of the Dubai realty market. The city offers abundant options for every type of investor. COVID-19 and subsequent limitations have previously affected the property market in Dubai and overall market performance in H1 2020 as compared to H1 2019. Yet, with the easing of restrictions from May onwards, the market has picked up rapidly and recovered steadily with high growth rates in transactions every month.
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Published Date: 08 October 2020
