The Real Estate Recovery is Being Fueled by European Families Flocking to Dubai
European purchasers, largely end-users transferring their families to Dubai's relative safety, have been driving a substantial resurgence in the emirate's property market, with prices reaching an eight-year high in June and a 10% year-on-year increase.
According to research published by Property Monitor, a leading property portal, European purchasers have recently emerged as "a crucial demographic driving sales, with the majority being end users."
"The incentive here, based on our interactions with brokers and industry experts, is the relocation of complete families from Europe rather than the solitary breadwinner residing in Dubai. "As further proof of this tendency, numerous schools have reported an increase in new resident enrolment," the report stated.
"What we're seeing here is an evolution… where individuals are buying homes to live in after renting for a few years, then selling those homes and upgrading to larger properties, creating a mature property cycle," said Lewis Allsopp, CEO of the estate agency Allsopp & Allsopp.
According to the portal, Dubai's tenacious property market maintained its resounding comeback in June, with a 2.1 percent price increase, the eighth consecutive monthly increase, as transaction numbers reached their highest level since December 2013, with 6,389 sales reported.
In June, the median price for flats was Dh928,848; townhouses were Dh1.7 million, and villas were Dh3.4 million.
"Prices increased by 2.1 percent on a monthly basis, to Dh924 per sq ft. They haven't been seen at these numbers in two years. Property values have climbed by 12.7% since bottoming out in November 2020, according to the data.
"The rebound is still uneven, with the largest price gains occurring in the market for villas and traditionally sought-after communities. However, we expect the recovery to level out in the second half of 2021 and slow to a more manageable pace across Dubai, according to the report.
The Dubai property market generated Dh68 billion in deals in the first 53 days of the year, according to figures from the Dubai Land Department. The forecast for the entire year is Dh300 billion or more.
Demand for homes at the top of the market remains strong, with transactions for properties worth more than Dh10 million reporting another solid month.
In total, 111 transactions were recorded for this segment in June, down from 117 in May but still indicating a healthy market.
Monthly sales increased by 43.7 percent, representing a staggering 174 percent increase from the previous June when buyers began to notice excellent real estate deals amid loosening movement restrictions.
In June, Azizi Developments had a block of delayed registrations for previous months, including off-plan and initial sales. Even without these deals, June had one of its best months for transactions since at least 2009, according to the report.
There were 2,419 off-plan transactions in June, a 43.3 percent increase over the previous month. As new launches stalled and buyers preferred ready-to-move properties, completed properties accounted for 62.1 percent of the market in June 2021, compared to 37.9% for off-plan.
However, as new project launches pick up steam, completed property transactions may start to give up some of these market share advantages. In June, initial sales transactions increased 51.2 percent to 3,800, representing the first sales of a property from a developer for an off-the-plan or completed project.
Monthly mortgages for villas and townhouses climbed, while loans for apartments decreased, reflecting buyer preferences. Overall, new loans declined 9.4% in June compared to the previous month, owing to a drop in bulk mortgages, which are typically taken out for apartment buildings.
Source: Khaleej Times