Finding the green shoots of recovery in Dubai's property market

 Look closely enough and you'll discover areas in Dubai that are seeing price stability and even values increasing

One of the notable trends seen this year in the prime market in Dubai has been the transition away from the primary market and towards the secondary market

If you look hard enough, there are green shoots of recovery in Dubai's real estate market, especially in the prime residential sector.

Although prices in the emirate's prime market as a whole were down by 3.7 percent in the year to the third quarter of 2020, a closer analysis reveals pockets of stability and even increases.

Knight Frank has launched its latest Prime Global Cities Index for Q3 which shows prices are still falling - by 1.7 percent in the latest three-month period. Not a surprise given years of oversupply and now a weaker economic backdrop.

 

But Taimur Khan, research manager at Knight Frank Middle East, told Arabian Business that the rate of decline is now slowing, where a year ago prices were falling by more than 5 percent.

"In more established prime areas we are beginning to see prices stabilise and even increase in some cases, for example on the Palm Jumeirah," he said.

Prices on the Palm seem to have reached their trough in May and since the average transaction price per square foot has increased for five consecutive months and now stands 4.2 percent higher, he revealed.

Khan told Arabian Business that one of the notable trends seen this year in the prime market in Dubai has been the transition away from the primary market and towards the secondary market.

In the year to date to October 2019, 56 percent of property purchases were off-plan purchases and over the same period in 2020, this number has fallen to 41 percent.

"There have been two main factors which have underpinned this trend. First, the relative revaluation in the secondary market compared to the primary market has made this market more attractive to both investors and end users. Secondly, as a result of near historic low mortgage rates and the increase in the loan to value (LTV) ratio by the UAE Central Bank, anecdotally, we have seen greater levels of demand from end-users who tend to favour the secondary market," he explained.

Due to this shift in demand there is a significant divergence in performance between the primary and secondary market, where, over the same period, off-plan transactions were down 27.2 percent, whereas secondary market transactions demand decreased only marginally by 1.2 percent.

Globally, Knight Frank's Prime Global Cities Index for Q3 showed that Auckland, New Zealand is the city with the fastest-rising prime prices in 2020 so far with values up by nearly 13 percent.

Overall, the index continues to register positive annual price growth despite the global pandemic, up 1.6 percent in the year to Q3.

Knight Frank said Seoul, Stockholm, and two cities in China (Shenzhen and Shanghai) saw price growth exceed 5 percent - all locations that are either considered to have handled the pandemic efficiently, applied a lighter touch in terms of restrictions or are already seeing an economic recovery.

Over 60 percent of the 45 cities tracked registered flat or positive annual price growth in the year to Q3 but with travel restrictions in place across much of the world, demand remains primarily domestic in nature.

Dubai is one the best city to live where everything is available on the doorstep, this is why Shaikhani Group invested their money, and they do have different projects which are successfully in process. Shaikhani group tries to find the best deals with good luxuries so the customer can enjoy all the luxuries at full Shaikhani group already handover few projects in Dubai worth of millions of dirhams, they always achieve their target on time which shows the positive sign of their progress. Soon they will handover gardenia residency which is located in Jumeirah village circle, it is been expected they will handover this project by the end of 2021 or maybe earlier depends on the working conditions and environment

As the pandemic situation is the worst in the whole world, things are really difficult to sort out because in this situation we have to be very careful taking extra safety precautions to make sure not to put labor’s life at risk because this work needs a lot of manpower and due to pandemic we have to maintain the 6-foot gap, so what we have provided our labor high-quality equipment to make sure work doesn't compromise and customers will get their apartments on time more than 1000 units handover in the projects of Cambridge business center, champions tower and gardenia 1 & 2 which is worth of 700 million dirham approximately 600 units are to be completed soon within one year in Champions tower 3, Gardenia 1 and 2 approximately value 300 Million dirham will be deliver