Market Report FY 2020
When it comes to the real estate market in the UAE, many expected a complete collapse. April 2020 was a month where the entire country halted, property transactions stopped, and demand was almost non-existent. Surprisingly, as the restrictions were lifted, the market reinvigorated, and we have seen a magnificent jump in the volume of transactions, but most importantly, in demand across the market. If we look at the total value of the transacted properties in 2020 decreased by 13.83%, while the number of transactions reduced by 13.32% YoY falling down to 34,774 units.
During the lockdown phase, residents started appreciating their homes more, and we saw a surge in the number of end-user buyers. This trend began when the Central Bank increased the LTV to 20% from 15% for first-time buyers. It led up to Q4 when we had 37% of end-user buyers, a significant increase from 17% in Q4 2019.
Whilst we saw a surprisingly high amount of transactions in the secondary market over 2020, the off-plan market did not fare as well. Developments were put to halt due to the pandemic, oversupply in the market, and lack of certainty in terms of economic stability thatduring the crisis. On a year-on-year basis, the secondary market overtook off-plan in the total value of transactions – accounting for 53% of the market share, an 11% increase from 2019. Property developers accounted for this, with many of the industry’s biggest names announcing pausing further developments until the supply got stabilised. However, towards the end of 2020, we saw successful off-plan launches that have been sold out quickly, especially in villa communities.
Although we have had a year-on-year growth in the Residential Leasing Department at Betterhomes Group, it was less dramatic than our Sales Department. We had a 21% increase in the number of new tenants leads in 2020, and a 34% increase in Q4. Dubai Marina remained the most popular area for apartments.
Just as the buyers, tenants were looking to move into bigger units, especially into villas. Arabian Ranches remained the top community for leasing, with the average rental prices increasing by 7% in Q4 in Arabian Ranches.