How has the coronavirus affected real estate in Dubai, one of the strongest real estate markets on the planet? Are there any changes in the cost of local housing? In which areas are apartments more in demand than in others? These questions are of interest to those who are going to own villas or apartments in Dubai in the near future. We have prepared this information to detail the important points that potential buyers might want to know.
There were good sales in the property market even at the beginning of the spread of the coronavirus, showing the optimism of investors. Some investors also purchase real estate remotely.
Despite the favorable situation in the metropolis, COVID-19 has already affected life in the city.
Thus, during the first months after the outbreak of the epidemic, the city was quarantined and some restrictions were introduced. At this time, the purchasing of real estate had somewhat subsided.
From April to May last year, 3,250 transactions were conducted in Dubai. When compared to the number of transactions in the same period in 2019, this is half the amount – in 2019, there were 6,326 transactions.
Despite this, the cost per square meter increased by 27% in 2020 compared to the same period from April to May in 2019.
In April last year, there were 2,400 various real estate purchases, 1,100 of which were operational and 1,300 were under construction or design.
Experts have noted the decline in the number of contracts for rented apartments compared to off-plan ones. At the same time, real estate under construction was rented mainly in:
If we consider operations without taking into account mortgage contracts, the average cost of apartments increased by 34.6%.
1,981 villas and apartments were purchased in May last year and off-plan deals decreased slightly. Additionally, there were 1,005 finished real estate and 976 planned or unfinished projects.
The cost per square meter increased by 21% in May 2020 compared to May 2019.
The number of mortgage loan agreements increased by 10.4% at the beginning of last year compared to 2019.
However, such transactions decreased by 55% during the quarantine period.
1,168 properties were bought with mortgages from April to May last year and 2,602 were purchased in 2019.
5 major construction organizations put the following houses into operation last year:
By the end of last year, almost 85% of construction was completed. The market was enriched by the following districts of Dubai:
According to the latest data from DLD (engaged in real estate transactions in Dubai), apartment buyers including investors are more interested in the following districts of the metropolis:
New buildings such as Dubai Hills Estate and Damak Hills are located near the main highways of the city so they are popular with buyers.
The cost of apartments in the metropolis still pleases both investors and tenants in most areas except for the following:
The cost of square meters has increased slightly in these districts.
The agency responsible for transactions registered 15,897 contracts worth a total of 32,500,000,000 dirhams in the first 6 months of last year.
Real estate in the best neighborhoods of the metropolis was being bought less compared to 2019 because of the restrictions on movement within the country and abroad (measures to prevent the spread of COVID-19).
After the restrictions were lifted in June 2020, the market was revived as most real estate organizations and construction companies introduced online tours and remote purchases. Some companies had these options available before the borders were closed.
In addition, people begin to trust financial institutions more after the Central Bank introduced measures to protect the economy. For example, the country has increased the mortgage-to-value ratio for first-time buyers by 5%.
Dubai Marina once again became one of the most popular neighborhoods in the first 6 months of last year. During this period, villas and apartments were purchased for 3,370,000,000 dirhams here. Property in Downtown Dubai was purchased for 2,590,000,000 dirhams and 1,520,000,000 in Dubai Hills.
In Dubayland, in the first half of last year, the number of signed contracts increased more than others compared to the same period in 2019.
On average, the cost of housing decreased by 2% per square meter in Dubai, from 1,277 dirhams in the 3rd and 4th quarters of 2019 to 1,252 dirhams in the first 6 months of 2020.
Prices for 1-room or studio apartments decreased from 694,000 to 648,000 in Dubai Marina while prices for 1-bedroom apartments also dropped from 1,110,000 to 1,060,000.
2-bedroom apartments cost 1,690,000 in Dubai Marina for the first half of last year.
In the residential complex, «Marina Pinnacle», there are incredibly popular apartments with 1, 2, and 3 bedrooms.
The most popular in the residential complex are:
The center of Dubai takes 2nd place in the popularity rating.
In this district, the average price per square meter increased from 1,808 to 1,830 dirhams.
A 1-room apartment can be purchased for an average of 901,000 in the city center.
You can find 1-bedroom apartments for 1,540,000 and 2-bedroom apartments for 2,061,000 (average cost).
The cost per square meter increased from 1,368 to 1,385 dirhams in Palm Jumeirah last year.
The following neighborhoods are also popular with investors:
During the quarantine period, real estate decreased slightly in these parts by only 6%.
Most people buy detached houses in Arabian Ranches. Here they mostly rent apartments for family holidays.
This place attracts investors with its spacious housing.
They charge an average of 987 dirhams per square meter. Last year, it would have cost 880 dirhams.
On average, a 3-bedroom villa here can be bought for 2,290,000. A 4-bedroom mansion is priced at 3,650,000, up from 3,570,000 last year. 5-bedroom houses also increased in price from 4,441,000 to 4,580,000.
Villas on Palm Jumeirah are slightly less popular than in Arabian Ranches but they are also in demand.
The sq. m. here has become cheaper by an average of 1.4%. Detached houses with 3 bedrooms cost an average of 5,160,000. 4-bedroom units cost about 9,220,000 while 5-bedroom units cost 16,000,000.
Last year, apartments were incredibly popular in Springs and Jumeirah Park, The Villa, Dubayland, Damak Hills, and Dubai Hills Estate.
Cottages are very popular here today. In 2020, the price of most villas fell by 1-4%.
However, the price per square meter increased from 806 to 816 dirhams in Springs.
In Dubai, prices did not change – they were priced at 629 dirhams.
Emirates Hills is one of the top 10 areas to buy real estate. The price per square meter will cost the buyer 1,709 dirhams from 1849 dirhams in 2019 – a decrease of 7.6%. Luxury 6-room penthouses are currently for sale in Emirates Hills which are very popular with buyers with a significant income. A house can be purchased for about 2,670,000 here. However, it is possible to find real estate that is either more expensive and cheaper.
A 7-bedroom mansion costs about 38,100,000 while a 5-bedroom mansion costs 20,500,000.
In a part of Dubai called International City, low-cost housing options are sold with high profitability – up to 9% per year.
In other areas such as Dubai Silicon Oasis and Jumeirah Lake Towers, rental returns can reach up to 8.2% and 7.9%, respectively.
As a result, in the first months of restrictions, there was a slight decrease in the cost of rent in the area in JVC – from 4% to 8%.
In this location in the first 6 months of last year, investors were offered the highest rental yield – up to 6.4%. Next was Springs with 6%.
Other popular parts of the metropolis are Arabian Ranches, Jumeirah Park, and Dubai. Last year, the rental yield was 5.5% and this is unchanged this year.
Currently, customer interest is also focused on Albizia in Akoya Oxygen where there are land plots, cottages, and townhouses. It should be emphasized that the costs are quite reasonable. You can become the owner of a villa for 760,000.
People who do not like the hustle and bustle of the metropolis choose to live in Rukan in Dubai which is located behind the Arabian Ranches. Life is calm, serene, and quiet here.
If you are looking for an off-plan, then pay attention to JVC, Downtown Dubai, Palm Jumeirah, and Business Bay. There are plans to build elite-level real estate but developers can make concessions on the payment schedule and can reach an agreement on an individual basis.
Off-plan cottages are purchased in the communities of Golf Place in Dubai Hills Estate and Sobha Hartland in Mohammed bin Rashid City (MBR). In addition, there is real estate located near Expo-2021, like EMAAR South in Dubai South.
Investors began to turn their attention to luxury real estate in April last year compared to April the year before.
Residential properties for sale in Dubai Marina, Palm Jumeirah, Arabian Ranches, and Jumeirah Golf Estates, as before, were popular with investors in 2020 and continue to be.
AX Capital helps investors choose and register their apartments in Dubai. Representatives of the company are happy to offer their services to you. Start by selecting real estate today. If you have any questions, please contact our staff via the phone number listed on the website.