Buyers Return But Dubai Realty Faces Long Road to Recovery
<span style="font-weight: 400;">Prime Dubai properties have been snapped up in the past few months by buyers taking advantage of decade-low prices, easy financing and an economy open for business despite the pandemic. </span> <span style="font-weight: 400;">Sales of luxury villas, sea-view apartm
Published -
Mar 20, 2021 6:48 AM
Prime Dubai properties have been snapped up in the past few months by buyers taking advantage of decade-low prices, easy financing and an economy open for business despite the pandemic. Sales of luxury villas, sea-view apartments and second-hand family houses have jumped, re-energizing a property market that saw a sharp fall in activity at the height of the pandemic and had been in a five-year slump prior to that. But with rents still falling and oversupply weighing, the road to recovery will be long for one of the emirate’s main economic engines. Dubai’s economy — reliant on trade, tourism and its international reputation as a regional hub for business services — was hard hit by the COVID-19 pandemic last year as firms slashed jobs. Many foreign workers, needed to support demand in a real estate sector that contributed 7.2 percent of GDP in 2019, left. Yet market activity has picked up in the last six months, after lockdowns and curfews were lifted, estate agents say, helping to stabilize prices for family villas and high-end beach and golf course properties. While prices of high-end villas have stabilized, apartment prices as a whole in the emirate were mostly still falling in February, a price index by ValuStrat shows. S&P credit analyst Sapna Jagtiani does not expect Dubai’s real estate market to recover to pre-pandemic levels until sometime next year. The dominance of secondary transactions marks a fundamental market shift for Dubai. Off-plan sales from new projects used to dominate, but several developers slowed or halted new projects last year. They included Emaar Properties’ Dubai Creek Harbor, a luxury development of waterfront apartments designed to house 200,000 people. New supply forecasts for 2021 vary. Real estate consultancy Knight Frank sees “historic levels” of new supply coming online this year, at around 83,000 residential units in Dubai, up from 35,808 last year, while Asteco expects around 41,500 this year, up from its estimate of around 34,050 in 2020. A wave of restructurings swept the industry and some developers went bust in the years following the 2008 financial crisis. Bigger players with links to the emirate or its rulers will likely be able to weather the storm, with access to cheap land and prime locations.
Tags : INTERNATIONAL Real Estate buyers Dubai recovery