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Low interest rates and falling prices have convinced a number of property buyers to swing back into action after Dubai ended its lockdown.
Total real-estate sales transactions grew by 60 percent in June, with an average of around 570 properties sold in Dubai every seven days. Buyers were not only acquiring off-plan properties; they were snapping up secondary units as well, according to the latest data from Property Finder.
“Some real-estate agencies are having record-breaking months,” said Lynnette Abad, Director of Research and Data at Property Finder. “Mortgage enquiries are high, interest rates are at an all-time low and the banks are giving their best offers yet.”
But which Dubai locations have investors been drawn to? Hot on the list for buyers these days are properties in Dubailand, which captured 8.2 percent of the sales; Business Bay, 6.3 percent; Dubai Marina, 5.9 percent; Town Square, 5.7 percent; and Dubai Hills Estate, 5.2 percent.
Many of those who can afford to acquire a new property were also snapping up off-plan units in Mohammed bin Rashid City (15.6 percent), Jumeirah Village Circle (11.7 percent), Downtown Dubai (9.2 percent), Business Bay (8.4 percent) and Dubai South (7 percent).
Year-to-date sales
So far, nearly 16,000 sales transactions worth 32.49 billion UAE dirhams have been logged from January to June this year. The second quarter of the year, when the lockdown was enforced, still ended with 5,564 sales transactions worth 10.88 billion dirhams, which is half of what was recorded in the productive first quarter.
Now, the transaction levels are back to where they were prior to the lockdown, particularly in February and early March 2020, indicating that the property market is headed for a V-shaped recovery, which is characterized by a rapid rise following a sharp decline.
“A strong June laid the foundation for a faster recovery and we are seeing patterns of a V-shaped recovery as we are back to the transaction levels of February and early March 2020,” Property Finder said in a statement.
According to Property Finder, the demand for villas and townhouses have also increased by more than 400 percent since the pandemic started.
“I believe the summer months will continue to be busy as most will not travel and prices are very attractive,” added Abad.
Enquiries
As for potential buyers, homes for sale in Dubai Marina appear to be popular. The area topped the list of enquiries for sale of residential properties, Property Finder said.
Also popular are Dubai Hills Estate, Palm Jumeirah, Jumeirah Village Circle and Downtown Dubai.
As for tenants, most of the enquiries in June were for properties in Dubai Marina, Jumeirah Village Circle, Dubai Hills Estate, Downtown Dubai and Business Bay.
Though there is a surge in buying activity, it’s too early to say that the residential property market is out of the woods. Analysts said the market is currently going through a mixed bag of negative and positive effects from the pandemic.
“There’s a lot of activity in the residential market [right now]. People either downsize because their personal situation has changed, or in some instances, upsize for the same [reason]. So, we are seeing a lot of tenant movement in the rental space,” said Simon Townsend, senior director and head of valuation and advisory business at CBRE.
“I think in the freehold space, both across the whole of the region, the disposals are getting more difficult, so developers are having to prioritize incentives, payment terms, concessions and others, that they give to try to keep the market flowing,” Townsend said during a webinar by Cityscape Global on Tuesday.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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