But the sector is still quite sluggish and slow
According to the latest data, the amount of real estate transactions has reached $ 3 billion. According to the Property Finder portal, everything points to the recovery of the market after the lockdown due to COVID-19.
4429 closed transactions last month are the largest result since March 2017. In percentage terms, the figure is even more impressive – an increase of 324% from last year.
The main indicator of the sector's recovery was the average cost of transferring funds per transaction: 16.77% in the case of villas/townhouses and 17.1% in the case of apartments, this category accounted for 77% of all real estate sold.
Property Finder also indicates that with such a significant growth month-to-month, it is possible to talk about the formation of a new trend in the real estate market.
Lynnette Abad Sakketo, director of data analysis at Property Finder explains: "To make the situation clear, we are seeing an increase of 36.5% in the total volume of operations and an 83.8% increase in the cost of operations when comparing May 2021 and May 2019".
GlobalData also shares positive information, according to which the construction sector is really showing the first signs of a long-awaited recovery this year. So, state developers are already planning new projects, relying on the growing price of real estate, supported by the overall growth of the UAE economy.
Companies such as Nakheel, Meydan and Emaar are currently in the early stages of developing new construction projects. The focus is on the previously mentioned villas and coastal apartments – two types of real estate that show particularly impressive growth rates.
We can also mention Emaar Properties, whose sales have soared by 250% over the past 5 months when compared year-to-year. The main direction for Emaar is residential real estate in key areas of Dubai, such as Dubai Hills Estate, Dubai Creek Harbor, Emaar South and the well-known Downtown Dubai.
At the moment, the company is launching three projects: Golf Palace terraces in Dubai Hills, Caya and Bliss in Arabian Ranches 3 and Palace Beach Residence in Emaar Beachfront.
Nakheel is also not far behind. On May 20, the company announced its new project – Murooj al-Furjan, which includes the construction of 418 villas near the Al-Furjan zone in Jabal Ali. The implementation of this project is planned to take the next few years.
At the same time, on May 23, Nakheel reported on the sale of 217 villas worth $ 218 million in the first stage of construction.
Colin Forman, deputy editor at MEED (Middle East Economic Digest) GlobalData, separately notes that we should expect a geographical shift in the construction sector to the south of Dubai. One of the main reasons is the presence of the Al Maktoum International Airport in this area, the Expo 2020 exhibition zone and the Dubai South complex launched for construction.
However, it is worth paying attention to the fact that, in general, the UAE real estate market is still quite sluggish. Despite the growing demand for real estate, since the introduction of restrictions related to COVID-19, prices for buying and renting real estate still do not reach the expected indicators, and the state budget continues to be under strong pressure from the pandemic.
The "boom" in the field of residential real estate, villas and apartments, can collapse as quickly as it began, pulling many companies along with it, if they do not hurry with the development of alternative construction directions in other areas of this sector.