Government initiatives to attract and retain talent in Dubai are spurring demand among property owners as the emirate’s real estate market continues to mature and forge a path towards recovery, according to Alexander Davies, chief commercial officer, Dubai Holding Real Estate. Much of the city’s real estate is continuing to work through an oversupply that
Government initiatives to attract and retain talent in Dubai are spurring demand among property owners as the emirate’s real estate market continues to mature and forge a path towards recovery, according to Alexander Davies, chief commercial officer, Dubai Holding Real Estate.
Much of the city’s real estate is continuing to work through an oversupply that drove down values by over a third since 2014.
But Davies told Arabian Business there was plenty to be “cautiously optimistic” about as Dubai begins to see the fruits of various government reforms, which include the remote working visa, retirement visas, Golden Visas and 100 percent foreign ownership of companies.
He said: “If you increase people’s confidence that Dubai is a home, then you’re going to see increased confidence in the real estate market. The two go hand in hand.”
According to Mortgage Finder’s 2020 report, 83 percent of borrowers in the UAE stated their purpose of purchase was to live in the property, as opposed to purchasing for investment purposes – which accounted for just 16 percent.
Alexander Davies, chief commercial officer, Dubai Holding Real Estate.
“That gives some credibility, in my opinion, to the recovery we’ve seen post-Covid.
“This is people committing to purchasing a home. We still have a significant part of the market, that is investors acquiring assets that are going to generate a yield and that maintains the position,” said Davies.
“The nature of Dubai is there will always be a significant portion of the population that are renting, but that statistic, that 83 percent of mortgages are against properties that people are looking to live in, really underpins that recovery.”
Last month had the highest total sales transaction volume in Dubai since December 2013, according to Property Finder. June 2021 had 6,388 transactions worth AED14.79bn, 44.33 percent more than the previous month in terms of volume and 33.2 percent more in terms of value.
Value of property transactions in Dubai hits four-year high for May
Total number of deals in the emirate for the year stands at almost 21,000, worth $12.8bn
High sales transaction volumes in April and May of 4,824 and 4,426 respectively made for a strong Q2, which had the highest quarterly volume of sales transactions since the fourth quarter of 2013. Q2 2021 had a total of 15,638 transactions worth AED36.86bn, 33.26 percent more than the first quarter of the year in terms of volume and 46.76 percent more in terms of value.
This brings the year to date total to 27,373 transactions worth AED 61.97bn – in comparison, all of 2020 had a total number of 35,041 sales transactions worth AED71.87bn.
Referring back to the number of end users in the emirate’s residential market, Davies said: “It’s a sign that the market is maturing, it’s a sign that everything the government is doing to increase longevity of residency and making Dubai more attractive, is working.
“When you’ve got that volume of transactions being end users, then that brings a real level of stability. People are invested in it, not just financially, but emotionally into the real estate market.
“Step-by-step, the market is working towards maturity and we are witnessing that.”
Dubai Holding, which lists Jumeirah Group, Dubai Properties and Tecom Group among its portfolio, added Meraas to its ranks in September last year. The group’s developments include La Mer, Madinat Jumeirah Living, City Walk, Jumeirah Beach Residence (JBR) and Villanova, among others.
“We’ve really seen the market improve and recover post-Covid,” said Davies.
He added that the “vast majority” of customers are UAE residents and citizens, while international investment is being received from Russia and Kazakhstan, as well as across Asia, India and Pakistan, and also from high net worth individuals in Europe.
“Some are actually looking to relocate businesses, families, everything, into the region, again, as a consequence of some of the foreign direct investment initiatives that are coming in,” he said.