According to the latest ValuStreat data, well-priced properties in Dubai for sale are boosting sales transaction in the emirate.
Property Sale Prices Almost at 2010 Level
Properties for sale in Dubai that are being offered at affordable prices are the main factor responsible for notable growth in property sales activity. Residential values last month dropped almost to the value they had post-2008 crisis. Latest ValuStrat research showed that the average rate per square feet almost reached the level it had in 2010. A decade ago, it averaged at AED 898 per square feet, while now it’s valued at AED 911, which is only 13 dirhams more.
In comparison, according to the Value Summit, 2014 prices averaged at nearly AED 1,400.
“With increasingly affordable secondary market property prices, August saw a significant growth trend in sales activity over the previous months; as well as when compared to August last year. Since the lifting of movement restrictions, home sales transaction volumes in Dubai continued what looked like a V-shape recovery trend,” says the latest ValuStrat research note.
How COVID-19 Affected Real Estate
Dubai real estate was already struggling with stagnant market conditions long before COVID-19 pandemic started. However, the novel coronavirus, combined with the postponement of long-awaited EXPO 2020, has brought further uncertainty. This is obvious in projects’ delays and the drop in property values and rental yields.
Additionally, there is material uncertainty when it comes to the investment market’s overall performance. According to experts, the situation will remain the same in 2021.
Dubai Properties for Sale in Higher Demand
Property values in Dubai declined 1.6% month-to-month in August, according to ValuStrat’s data. That is a 0.3 % improvement in comparison to the April–June movement period when Dubai was in lockdown.
Yearly, residential capital values dropped by 13.8%. Furthermore, Valustrat stated that all Dubai properties monitored by them saw month-to-month capital values decline by up to 1.9%.
According to them, communities such as Jumeirah Lakes Towers, Arabian Ranches, Emirates Hills and The Views, have seen the least registered capital value declines.
Dubai Ready Properties vs Off-plan Projects
Volume performance of sales transaction registered more interest in ready properties in comparison to off-plan projects with the ratio of 1:2 in favour of ready properties.
Successful transactions in the secondary sector grew 18.7% compared to July, forming a V-shaped recovery trend. Moreover, in comparison to last year, transactions jumped by 46.2%.
But due to the decline in project launches, off-plan sales dropped by 25.2 % in comparison to July.
Emaar, Nshama, Dubai Properties and Nakheel projects were among the most popular ones to invest in among the off-plan properties in Dubai. Especially those located in Jumeirah Village, Arjan, International City and Dubai Hills Estate.
Among ready properties, buyers currently prefer to invest in those located in Dubai Marina, Jumeirah Village and International City. “At AQUA Properties we have noticed a higher demand in areas such as Palm Jumeirah, Dubai Hills and Dubailand in general. Buyers are keener on investing in villas or townhouses nowadays, rather than in apartments”, says Daniel McGeachy sales director at AQUA Properties.
What Can We Expect?
Because of COVID-19-induced global financial crisis, supply vs demand ratio is controlling the market prices. Preserving real property values by finding the right balance between demand and supply is now the main challenge.
If you wish to buy properties in Dubai, and you want to get expert advice on where to invest, feel free to contact us on +971 4 518 7555. Our dedicates real estate sales consultants will be happy to assist you.