Dubai’s property market is taking new leaps in the third quarter of 2021. Looking at transactions alone, the total number was up by 81% from Q3 2020 and 48% from Q3 2019.
That’s according to our recently released Q3 2021 Dubai Real Estate Market Report. It reveals that the demand in the market remained strong in the third quarter despite summer being conventionally considered a quieter period in the market. Numbers ticked upwards for both sales and leasing. And while the latter lagged behind, it still registered double-digit growths.
Consistent with previous quarters since the pandemic hit, villas and townhouses saw the highest rise. This drove recent price increases for these properties in the past 12 months. However, there are early signs of a slowdown—a welcome respite for buyers, who are stepping back from high prices and, interestingly, turning to off-plan properties instead.
Whether a slump is imminent in the market, Richard Waind, Betterhomes’ Group Managing Director Richard Waind said, “Absolutely not. The recent UBS Real Estate Bubble Report placed Dubai as the best valued global real estate market in the world. With a worldwide audience reinvigorated by Dubai at the moment, I expect prices will continue to rise for the foreseeable future, albeit at a slower rate than we have seen over the past year.”
Here are the headline statistics from the report:
The rise in the value of the property sold in Q3 outpaced transactions, with a 128% increase YoY, reflecting price increases that have been experienced in many areas since the bottom of the market last summer.
Completed villa transactions are up 105% against the same period last year. The apartment sector also enjoyed a resurgence with a 96% increase in volumes compared to Q3 2020.
Prices for villas in prime communities have seen substantial rises from their record lows last summer. Palm Jumeirah (55%), Jumeirah Islands (54%) and Emirates Living (52%) lead the way as buyers, predominantly end users, have sought lifestyle purchases in well-established communities.
While apartment price rises have lagged those of villas over the last year, many prime areas have seen double-digit price growth, with Palm Jumeirah still leading the way at 26%. Price rises seen in the apartments sector have been less uniform, with some communities such as Discovery Gardens (-2.45%), Dubai South (-12.9%), Silicon Oasis (-8.05%) and International City (-5.67%) all seeing a decline over the last year.
While Q3 2020 was dominated by domestic end-user demand in the wake of lockdown, Q3 2021 has seen a move in the market towards investors, both locally and internationally. Of the new transactions agreed at Bettehomes in Q3 2021, 62% of successful buyers identified themselves as investors, up from 51% a year ago.
Buyers seeking to upgrade their homes but outpriced in the current secondary market are eyeing new developments with lower prices and favourable payment plans offered by many developers. Buyers in Dubai are certainly turning more towards off-plan investments, with the number of off-plan transactions increasing from 39% to 45% QoQ. Transactions are set to reach the pre-pandemic level of 57% recorded in Q3 2019.
At Betterhomes, leasing transactions were up 21% for the year, 6% over the summer months. While many new tenants coming to the market will look at well-established apartment communities such as Downtown Dubai, JBR or the Marina, there is a growing number of high net worth professionals and business owners relocating to Dubai, which increased the number of rentals for villas with over 5 bedrooms by 63%.
For more information, get in touch.