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In H1 2021 the overall volume of transactions increased by 74 percent and the value of property sales transactions grew by 113 percent.
In the first half of 2021, Dubai’s residential property sector witnessed a V-shaped recovery following bottoming-out in November 2020, SmartCrowd, a property investment and technology platform, said in its research.
During the first six months of 2021, the overall volume of transactions in Dubai’s residential property market increased by 74 percent compared to the same period in 2020, while the value of property sales transactions grew by 113 percent in the same period, analysts at SmartCrowd say.
According Siddiq Farid, CEO and co-founder of SmartCrowd, a combination of factors contributed to the strengthening of the transactions volume and value in Dubai during the first half of this year.
'Government policies to introduce attractive visa and residency schemes for investors and professionals are starting to bear fruit. Incentives to support entrepreneurs and the private sector, proactive safety measures to combat COVID-19 and visionary thinking for events such as Expo 2020, have underpinned investor appetite for real estate in Dubai. While nothing is guaranteed, we expect that confidence to continue to grow for the remainder of the year,' said Farid.
Ready properties were most popular among investors: 72 percent of overall deals were signed for completed homes as against percent off-plan. High demand for ready stock also helped to increase prices per square foot for available properties up by 10 percent.
'With a lack of new supply in Dubai’s most popular areas and pricing at levels last seen in 2011, there is positive sentiment in the market and a resultant boost in demand for existing properties,' Farid pointed out.
Some of the strongest sales performance was witnessed in Dubai’s villa segment as people’s preferences have shifted to larger living spaces, with room for outdoor activities.
The research shows that the sales average for ready villas in Dubai has grown by 19.3 percent from USD 2,064 per square foot in H1 2020 to USD 2,464 per square foot in H1 2021. Similarly, off-plan sales prices of villas have increased by 9.3 percent from USD 1,864 per square foot in H1 2020 to USD 2,037 per square foot in H1 2021. As for apartments, ready sales prices have gone up by 8.7 percent year-on-year but off-plan apartment prices have dropped on average 9.5 percent compared to the same period last year.
The report noted that average off-plan price per square foot had fallen by 3.42 percent compared to H1 2020 and attributed it to new supply focusing on affordable housing segments and thus putting downward pressure on average pricing.
The report also looked more closely at specific areas and segments in Dubai. For example, Palm Jumeirah had a 34 percent uptick in the value of property transactions and a 221 percent increase in volume of transactions. JLT has shown the highest increase in transaction volume, which was 262 percent.
'Dubai is a unique market with some pockets of the city performing better than others. One of the advantages of investing in real estate via crowdfunding is diversification of your portfolio – you can spread investment over a number of areas and follow the overall trend of the market, rather than putting all your eggs in one basket in a single property,' SmartCrowd's CEO pointed out.
Farid said crowdfunding properties can help to further stimulate the market and support developers with their sales efforts. Investor sentiment is returning, and personal finances are beginning to recover too. 'While investing in an entire property in Dubai might still be out of reach for some, investment via crowdfunding allows people to take a fraction of a property from as little as USD 550,' Farid said. 'Crowdfunding in real estate is an accelerating trend and has the potential to be a major catalyst for the region’s property market.'
