At the very start of 2020, the Dubai property sector showed some solid resilience with a year-on year increase in sales, according to Chestertons MENA. In its investigation of the first three months of the calendar year, the house advisory firm said the first quarter saw a downturn in brand new project launches, with approximately 4,500 residential units launched for sale by developers, that was down from over 6, 000 in Q1 2019 and 12, 000 plus in Q1 2018. However, a strong start to the year, resulting in a rise in sales, reflected a more optimistic buyer mindset, Chestertons MENA acknowledged. The rate of decrease in residential values slowed in the first quarter, with average apartment values and rents falling by 1.8% and 1.5%, respectively.
Dubai Villas also saw more moderate decreases, with average values falling by 0.8 percent and rents 1.3 percent on a quarterly basis.
In March, everything then changed.
The Sudden Impact of COVID 19
COVID-19 had brought with it an economic instability for which none of us were prepared. Markets do not like uncertainty and in turn, businesses suffer in varying degrees. No more is evident than in the lively and dynamic Dubai real estate market.
As COVID-19 hit, viewings suddenly halted and property transactions nosedived in Dubai. Understandably, people were concerned. As Lockdown intensified and staggered on, two strategies presented themselves as a property buyer: sit and wait or try to find a great buying opportunity at a much reduced price. Both strategies require some bravery and confidence on the part of the buyer.
The Dubai Property Market Outlook Improving
Based on very recent data found by Mortgage Finder and Property Finder, the softening of COVID-19 restrictions that were set up, the number of property listings in the United Arab Emirates overall increased compared to previous weeks. This had a positive impact on market sentiment throughout the real estate sector. UAE were very strict with their lockdown from the initial signs of COVID-19 meaning their livelihood has not been affected as severely and they’re looking to return to normal conditions much sooner than the rest of the world.
“We are starting to see signs of the market returning to a new normal. In the past week, both the listings on the portal as well as the number of listings views increased,” said Lynnette Abad, director of research and data from the Property Finder Group.
The number of listings have been up 6 per cent for 5 percent and rental for sales against the previous week. Even though the severity of the impact on Dubai’s real estate sector will depend on how long life is impacted by the virus and lockdown. But there are some signs of recovery elsewhere as stated by Abad:
“In addition, a new trend emerged this past week which we didn’t see during the lockdown period which is rental leads for villas in Dubai are up by 11 percent compared to the same week last year,” she added. “In the previous weeks during the lockdown, we also started to see an increase in searches for villas and townhouses, outside space such as gardens and balconies and pools in villas.”
It is hoped that giant World Expo 2020, which has been delayed until 2021, combined with a plethora of government stimulus measures, can improve the property market and shore up market sentiment or at least lead to meaningful restoration of buyer confidence.
If you are considering buying property in Dubai, why not get in touch with One Investments today.