The current positive indicators of Dubai real estate market will continue in the second half of the year

The current positive indicators of Dubai real estate market will continue in the second half of the year

A range of government measures are fundamental to investor confidence.

According to the current sector indicators, experts expect that the achievements and market records in the first half of 2021 will continue to push the market up, supported by success of the fight against COVID-19, visa reforms and government measures to support the industry and combat overproduction and market oversaturation.

Villa segment is performing especially well, significantly outstripping the growth rates of the apartment segment. This should give rise in prices by 5% in the period from July to December this year.

Haider Tuaima, head of real estate research at ValuStrat, explains: “Depending on the evolution of the COVID-19 pandemic, the second half of the year may continue the positive trends that began in the third quarter of 2020. This became possible due to the generally positive shifts in the market, which were supported by government measures, which gave impetus to an increase in demand for real estate and a reduction in oversaturation.”

It is noted that nationwide vaccination is more than successful and strengthens the market.

“The average property cost per square meter is $ 2,637.37, and banks are offering record low interest rates on loans, which is combined with an increase in the LCV to 85%, which makes the purchase of real estate more affordable than ever,” continues Tuaima (note: LCV - Lifetime Customer Value).

The latest data from the Property Finder portal shows that there were 27,373 transactions worth $ 16.87 billion in the first half of 2021. For the entire 2020, only 35,041 transactions were concluded worth $ 19.57 billion.

Thus, 2021 achieves the best performance in the last 8 years.

A large number of regional and international buyers and investors are moving to Dubai, entering the premium segment of the real estate market due to extremely attractive prices for their affordability.

In 2020, prices for luxury real estate have reached their historic lows. In 2021, real estate valued at over $ 2.7 million took a record 2.5% of the market.

Low loan rates have allowed many tenants to become home buyers. Villa market is growing as a large number of people who previously worked in offices have moved to remote employment. In view of this, there was a need for more spacious property and this distracted the attention of buyers from apartment market.

In the first quarter of 2021, the secondary real estate market grew by 64% compared to the same period in 2020. The off-plan real estate market shrank 29% as the majority of buyers shifted their focus to finished houses.

It is against this background, the rating agency S&P Global recently released positive forecasts for the real estate market of the Emirate, predicting profits growth in 2021 by 30%. The sector is expected to recover by 3.5% in 2021 and by 2.5% in 2022.

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