Easing
pandemic-related restrictions to benefit property, tourism, aviation and other
sectors; Real estate transactions exceed Dh180 billion in first nine months of
2022
The Dubai real estate looks set to regain
growth momentum as the government eased most of the pandemic-related
restrictions that will benefit tourism, aviation, hospitality, logistics and
retail sectors, experts say.
Analysts,
top executives and industry experts said property sector will be ultimate
beneficiary of the ease in travel restrictions which were imposed to contain
the Covid-19 pandemic. They said real estate sustained steady growth trend even
during the pandemic and now it will pick up growth momentum as investors face
no major restrictions to visit and invest in the UAE.
Haider Tuaima, director and head of Real Estate
Research at ValuStrat, said real estate will sustain an upward trend as strong
demand persists in the market."We can expect continued high momentum in relation to demand for end-user
as well as investment properties in Dubai. The pandemic restrictions have not
dampened the market as a record number of sales continued during the last 21
months. But this trend could change due to the rising cost of living,
increasing mortgage rates, stronger US dollar, and anticipated new
supply," Tuaima told Khaleej Times.
Latest data indicates that the Dubai real estate
registered record sales during the first nine months of 2022 as investors and
end-users rushed to purchase properties in the emirate.
“The
total sales value exceeded Dh180 billion with more than 67,000 transactions
during the January-September 2022, making it the largest sales value ever
during the first nine months of the year. Previously, the emirate recorded
Dh116 billion highest sales in the similar period in 2009,” according to the
latest data by Dubai Land Department.
Bright prospects ahead
Imran
Farooq, CEO of Samana Developer, said ease in Covid-related restrictions will
further accelerate growth in the real estate sector.
"It's
a moment as the world simply wants to forget about the pandemic and move on. No
Covid limitation will encourage more travellers. More in-bound visitors and
visitors means Dubai real estate will get a boost," Farooq told Khaleej
Times.
David
Abood, partner at real estate consultancy Core, said the strong momentum that
the Dubai real estate market gained over early 2022 continues with robust
growth witnessed across performance indicators for all asset classes.
"Transaction
volumes continued to keep their upward trajectory with third quarter of 2022
recording the highest value of secondary market transactions concluded ever in
a quarter and the second highest number of transactions till date.
"As
we go back to pre-pandemic levels with travel, mobility, occupancy levels and
regulations (particularly the recent announcement that masks are no longer
required, with a few of exceptions) indicating a return to normalcy, we expect
socio-economic sentiment to improve further," Abood told Khaleej Times.
HNWIs to lead
Ata
Shobeiry, chief executive of Zoom Property, said Dubai property market has a
history of showing great resilience to external factors. "There was a dip
when the pandemic was at its peak in the region. However, thanks to the
government policies, a successful vaccine drive, and incentives offered by
developers, it picked up pieces quickly and has been cruising since then,"
Shobeiry said.
"And
now, since the pandemic restrictions are officially over, the market will
continue its upward trajectory. Many foreign investors and HNWIs have already
shown interest in Dubai real estate, which is evident from the market’s
performance in the last few months," he said.
Ayman
Youssef, vice-president, Coldwell Banker, UAE, said travel and tourism
contribute a substantial part of the GDP, and have a significant impact on
various industry, business and economic aspects. Besides the fact that 10 per
cent of employment comes from this industry which accounts for a noteworthy
part of the population, the inflow of tourists, relaxed visa rules and
increased business opportunities is bound to create an increased need for
housing and real estate facilities.
"It
is basically a ripple effect, opening up of travel and tourism will result in
an influx of visitors, businessmen and investors leading to a better economic
situation and increase in population. This will subsequently result in an
increase in demand of real estate properties and will drive better
pricing," he said.
Villa sales to dominate
Tuaima of
ValuStrat said the villa segment will sustain strong demand in the post-Covid
era.
"Villa
and townhouse prices appreciated 52 per cent since the pandemic trough, but are
still overall lower than the 2014 peak with exceptions in Palm Jumeirah and
Emirates Hills where villa prices are now well above their 2014 highs. Demand
is expected to continue to be strong particularly for larger, well-located
homes, albeit at slower growth rates," he said.
Farooq of
Samana Developer said Dubai Land Department stats and new enquiries for our
projects are currently witnessing extra ordinary demand from end-users.
"It
is not only villa or penthouse but the investor interest is across the board
including high quality apartments and luxury properties gaining popularity
among new millionaires and billionaires flocking to Dubai," he said.
Villa supply constraint
Abood of
Core said villa demand will remain strong due to supply constraints.
"Yes,
the reason for increase in villa prices and occupancy rates reflect the strong
demand for villas thereby creating a supply deficit. The need for larger unit
types, especially villas and townhouses having sufficient usable outdoor space
with masterplans offering a variety of amenities and a sense of strong
community remains a key decision driver for many residents, particular for
families with children," he said.
"While
we expect some reversal in demand from villas to apartments due to the high
prices, most existing villa occupiers would prefer moving to affordable areas
to continue living in villas," he said.
Double-digit growth
Shobeiry of Zoom Property said villa prices in a few
neighbourhoods continue to cross double-digit figures in terms of monthly
growth.
"Take
the example of Palm Jumeirah and Dubai Hills Estate. These communities
witnessed a price increase of 18 per cent and 11.5 per cent, respectively, in
August 2022. Despite this significant price increase, the demand for villas is
increasing. This clearly shows that the villa segment will sustain strong
demand post-Covid era as well," he said.
Yourself
of Coldwell Banker, UAE, said villa sales surged during the pandemic as people
preferred bigger space over the apartments.
"While
the demand for the villa and luxury segment did pick up during the pandemic as
people were looking for bigger and better working spaces due to the change in
lifestyle and work schedules, we are positive that this trend will sustain and
we can expect moderate growth," he said.
"The
ultra-luxury segment will grow at a slower rate, however beach front properties
are expected to continue the growth, mainly because at the moment the demand
for beach front properties is high while supply is limited," he said.
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