Off-plan property sales in Dubai quadrupled in July, boosting the emirate's property market transactions during the month, as the UAE economy continues to recover from the impact of the Covid-19 pandemic.
Dubai property deals, excluding land transactions, more than doubled year-on-year in July to Dh10.7 billion ($2.9bn) with demand for homes outperforming offices, according to a report by EFG Hermes.
Residential property deals surged 162 per cent in July to Dh9.35bn, up from Dh3.56bn in the same month last year, driven by higher off-plan sales.
The emirate recorded a 301 per cent year-on-year jump in off-plan property sales in July with a total value of Dh3.35bn for the 1,716 units sold, the investment bank's report showed. This was partially helped by "robust activity" in Dubai Harbour, it said.
The UAE property market – which softened due to a three-year oil price slump that began in 2014, oversupply concerns and the pandemic – is starting to bounce back, according to property consultancy reports.
Property sales transactions in Dubai hit a 12-year high in July, with the emirate registering 4,384 sales deals worth Dh11.18 billion, listings portal Property Finder said earlier this month.
People upgrading to larger homes with outdoor amenities have driven demand amid a rise in remote working and learning.
Economic support measures and government initiatives – such as residency permits for retirees and remote workers and the expansion of the 10-year golden visa programme – have also helped to improve investor sentiment.
Dubai's residential market registered growth across the luxury, affordable and budget segments in July compared to the same month of 2020, the EFG Hermes report showed.
Luxury home sales in July led the increase in residential transactions, jumping 360 per cent year-on-year to Dh2.68bn.
Palm Jumeirah registered the best annual price performance, rising to Dh2,143 per square foot in July 2021 from Dh1,268 in July 2020, according to the report. The worst performing area in terms of price was Motor City, where annual prices in July fell to Dh677 per square foot, down from Dh1,244.
"Year-on-year pressure in the rental market persisted, yet Downtown Dubai and Palm Jumeirah outperformed," Mai Attia and Shaza Shaker, authors of the EFG Hermes report, said.
Rent for a high-end luxury two-bedroom apartment in the Downtown Dubai area rose to Dh184,661 in July, from Dh140,119 in July 2020, according to the report. Palm Jumeirah two-bedroom apartment rents increased to Dh161,263, up from Dh135,022 in July 2020.
Property sale prices continued to recover to pre-pandemic levels in July, rising 29.4 per cent year-on-year to Dh1,375 per square foot, as all segments registered higher prices.
Luxury property sale prices rose 40.3 per cent year-on-year to Dh2,190 per square foot in July, while affordable real estate sale prices increased 26.1 per cent to Dh1,195 and the budget segment climbed 7.1 per cent to Dh714, the report said.
Office market activity in July fell 31 per cent month-on-month to Dh210m as ready-unit sales slid 26 per cent month-on-month, and off-plan sales continue to be "muted".
"Office rental yields contracted 65 basis points year-on-year, pressured by lower luxury space performance," the report authors said.