Real estate sales picked up in Dubai and Abu Dhabi: who are the buyers?

During the lockdown in 2020 sales plummeted but started to pick up when coronavirus restrictions were eased.

Realty sales in Dubai, Abu Dhabi and other emirates in UAE have increased over the past several months, demonstrating that the coronavirus pandemic has done little to discourage homebuyers. However, according to a new report, much of the demand hasn’t been from investors.

91 percent of the purchases, which is the most part, have been made by first-time buyers and end users, and only 9 percent have been made by investors, real estate services and investment management firm Colliers International said in a report released on Monday.

The findings were based on the research conducted by Colliers last year that spoke with real estate professionals in UAE.

82 percent of the respondents Colliers spoke to agreed that mortgage purchases are increasing and first of all it is attributed to the increased demand from first-time buyers and end users.

Colliers also found that an increasing number of tenants are now looking to invest in a property as the rent and mortgage payment gap narrows.

Other contributing factors include current low interest rates, reduced loan to value, reduced fees and attractive property prices.

UAE’s real estate market had already been subdued before the COVID-19 pandemic and the primary reason for that was the huge supply glut. During the lockdown in 2020 sales plummeted but started to pick up when coronavirus restrictions were eased.

In February 2021, sales transactions increased by 25.2 percent compared to January, with existing ready-to-move-in homes seeing a 21.1 percent increase, according to ValuStrat. However, residential capital values have remained weak, declining by 0.6 percent monthly on average.