Quarterly Reports Dubai 2020-2022
Quarterly Calculation/ Report 2020
The first half of 2020 was quite shaken by the coronavirus. So it is not surprising that this has also affected the real estate market in Dubai. The real estate market entered the 2020 "Expo Year" in a positive frame of mind. There was a very optimistic expectation that the real estate market could recover or even boom by the middle of the year or the beginning of the Expo. But the 2020 signs were good, with broken trading records (February 2020) and a significant increase in demand, especially in the off-plan market.
Q1 2020 | Off-Plan (in 2019) January 2020 - 1,342 (1,361) February 2020 - 2,746 (1,708) March 2020 - 1'506 (1'888) Q1 2020 | Secondary Market (in 2019) January 2020 - 1,280 (1,121) February 2020 - 1,452 (1,340) March 2020 - 1,449 (1,231) (Source: Terra Nova)
However, the coronavirus also reached Dubai in mid-March 2020, where drastic government measures, curfews and entry bans were imposed. As a result, the real estate market stalled more or less immediately, and few transactions were completed. Despite all this, May 2020 statistics still show nearly 1,500 real estate transactions.
Q2 2020 | Off-Plan (in 2019) April 2020 - 1,293 (1,395) May 2020 - 962 (2,034) June 2020 - 1,094 (1,730) Q2 2020 | Secondary Market (in 2019) April 2020 - 466 (1,481) May 2020 - 453 (1,265) June 2020 - 1,147 (941)
In mid-June 2020 came the long-awaited relief. Apart from the general masking requirement, all prohibitions and restrictions were significantly relaxed. Along with this, real estate transactions also increased again. Focus-wise, however, the rental market is recovering and gaining further momentum. Many households that used to live in apartments are now looking for houses with gardens (as a result of a total of four weeks of strict exit restrictions).
Prices, purchase prices and rents have dropped slightly on average in the last 6 months compared to the previous six months, but not in all neighborhoods. "Location and quality count!" Particularly well-located properties are holding up again, and prices are stable.
The third quarter was marked by a series of promising events. According to reports from Bayut and Dubizzle, prices remained competitive. Some established residential areas observed a slight decline in rental and purchase prices of less than 5%. Transactions increased, particularly in the most desirable residential areas, highlighting the importance of location and property quality.
The Dubai Land Authority recorded more than 46% increase in transactions in the second quarter.
So it is clear that Dubai has bounced back from the setback of the coronavirus pandemic and remains an attractive location for real estate investment. Moreover, Dubai's appeal has been boosted by news such as the announcement of a retiree visa program and the latest trade show dates.
Quarterly Calculation/ Report 2021.
Dubai's real estate market reaches and records all-time highs throughout 2021. After an initial downturn at the start of the COVID-19 pandemic, the market quickly recovered. Dubai reaches its highest record in 12 years, with real estate sales exceeding AED 151 billion (approximately USD 41 billion). The total number of property transactions was also the highest since 2013 at 61,241, according to Property Finder, with nearly 60% of all transactions taking place in the secondary market and 40% in the off-plan market.
During the ongoing Corona pandemic, Dubai identified itself as a "safe haven" for many. Thanks to a strong and stable government, Dubai has always been a normal haven. The government's efficient response to the pandemic, the rapid resumption of international air travel and the postponement of the Expo (World Expo 2020) by one year enhance Dubai's existing appeal as an investment destination and primary and secondary hub. With the Dubai Master Plan 2040 and associated legislative changes, Dubai will continue to enjoy the trust and appreciation of the international investment community.
Wie S.H. Kronprinz von Dubai Skeef Hamdan bin Mohammed bin Rashid Al Maktoum sagte: “Dubais robuste Infrastruktur, flexible Gesetze zur Anpassung an sich ändernde Marktbedingungen und ein sicheres Umfeld haben dazu beigetragen, das Vertrauen der Anleger in den Immobiliensektor zu stärken. Das wachsende Interesse der Anleger bestätigt die Wirksamkeit der strategischen Wirtschaftsinitiativen des Emirats, die darauf abzielen, seine Führungsposition in verschiedenen Sektoren zu stärken und sein globales Ansehen in Bezug auf Entwicklungsindikatoren zu optimieren.”
Quarterly Calculation/Report 2022 Q1
Exceptional transaction growth in the first quarter reached a high record compared to previous years. According to CBRE, total trade volumes from January to March 2022 reached an all-time high in the first quarter.
Dubai's real estate market witnessed a massive 125% increase with a total turnover of around AED 56 billion in over 20,000 transactions due to the significant rise in villas and apartment sales. This is because 77% more apartments and 58% more vacation homes were sold compared to Q1 2021, with the majority of transactions involving the sale of apartments. Unplanned sales increased by about 95%, and aftermarket sales increased by about 75%. It is also interesting to note that mortgage transactions decreased by 27% year-over-year. This indicates a high number of cash purchases or sales by cash buyers.
Apartment prices increased by about 10% and villas by about 20%. Compared to the peak at the end of 2014, the average price per square meter for apartments and villas dropped by 26% and 12%, respectively. The highest average selling prices per square meter were achieved by apartments in Downtown Dubai at over CHF 5,380 and villas in Palm Jumeirah at over CHF 7,800.
Rents in Dubai also increased by around 13% in the 12 months until March 2022. Prices for rental apartments increased by an average of 11%, while prices for villas rose by 22%. According to the Dubai real estate market report by Bayut & dubizzle, Dubai Marina is the most sought-after area for rental apartments, with Downtown Dubai in second place and Palm Jumeirah in third.
The 1-bedroom apartments on Palm Jumeirah recorded the highest rent increases. This upward trend in Dubai property rental and sales prices can be explained by increased demand from a new wave of expatriates following Expo 2020.
The emirate's efficient policies, a strong recovery from the Covid 19 pandemic, and visa reforms have also contributed to Dubai's popularity for long-term visitors. We expect price growth to continue steadily into the second quarter of 2022 before slowing somewhat in the summer. Generally, we are very confident and hopeful about the Dubai real estate market in 2022.
Quarterly Calculation/ Report 2022 Q2
Effizientes Management weltweiter Herausforderungen und Aufgaben wie der Corona-Pandemie und wirtschaftliche Stabilität werden Dubai langfristig zu einem bevorzugten, globalen Investitionsziel machen. Die neutrale Haltung der VAE gegenüber dem andauernden Bürgerkrieg in der Ukraine hat auch das Vertrauen der Anleger in die VAE gestärkt. Viele russischsprachige Menschen wurden durch Sanktionen „gezwungen”, das Land zu verlassen und konnten in Dubai und Abu Dhabi Zuflucht finden.
According to the Henley Global Citizens Report, there will be a net influx of millionaires. Despite challenges from global tensions and inflation, Dubai's real estate market shows no signs of slowing down. The market saw higher activity levels on both a quarterly and annual basis. Transaction volumes increased by 9% quarter-over-quarter and 44% year-over-year in the second quarter of 2022.
Since the end of COVID restrictions, the average transaction price per square foot has steadily increased, and this quarter was no exception. The average transaction price per square meter increased by 7% quarter over quarter, the highest quarterly increase in a year, and by 22% year-over-year, reaching AED 1,391/sq.ft.
Mortgage transactions remained steady despite the recent announcement of interest rate hikes by the UAE Central Bank. Existing investors and new property buyers rushed to obtain financing at current rates during the quarter, with the majority preferring a fixed rate structure to avoid the expected future rate hikes imposed to curb rising global inflation.
Quarterly Calculation / Report 2021
During the quarter, the number of real estate sales increased significantly in both the primary and secondary markets, by 50% and 40%, respectively, compared to the same quarter of 2021. Performance in the luxury (AED 10 million and above) and ultra-luxury (USD 10 million and above) segments reflects the increasing influx of millionaires to the city. The number of transactions exceeding AED 10 million increased by 113% year-over-year, while the value of these transactions increased by 141%. The ultra-luxury property segment grew by 28% yearly and 50% quarter over quarter.
The highest transaction value during the quarter was in Downtown Dubai. Notably, 69% of these transactions were for off-plan and resale units under construction. Current prices Downtown and the fact that it is rapidly approaching maturity explain the high activity level. Commercial office and retail transactions are declining by 7% year-over-year and 4% quarter-over-quarter. However, the transaction value is increasing by 69% annually and 13% quarterly, indicating higher value per transaction and consumer preference for prime real estate.
With the 2022 World Cup in Qatar, the announcement of a Russian company relocating to Dubai from Europe, and a growing population, Dubai's real estate market will continue to provide positive momentum in the coming quarters, reaffirming the demand trend accordingly. Neither rising inflation and interest rates nor the tensions in Europe caused by the war in Ukraine have weakened the market. For these reasons, Dubai is now considered a safe haven for investment.
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