What was the general market movement in Dubai in Q3?
Up and up and up. Rents were on the rise in most areas of the city during the third quarter as the UAE continued to recover from the economic effects of the coronavirus pandemic.
Apartment rental rates rose 3 per cent quarter on quarter while villas rose 6 per cent, according to property consultancy Asteco.
Annual changes were significant in the villa segment, with a 19 per cent rise. Apartment rents were up 3 per cent annually.
“Villas were the predominant focus of demand and the limited number of new handovers translated into higher rental and occupancy rates,” the company wrote in its third-quarter report.
“As expected, the start of the Expo 2020 has lifted real estate demand and rental rates. However, the currently perceived positive market sentiment is believed to be short-term, considering the significant amount of coming supply,” it said.
The shift to remote working has led to tenants seeking more space, which has translated into demand for the villa communities in the outer suburbs. This has resulted in rises of more than 40 per cent annually in Dubai Hills and more than 30 per cent in Arabian Ranches.
Property agents reported that some units did not require advertising due to people already being on waiting lists. The general mood is that the market has not been this busy in years.
Third-quarter rental data from ValuStrat, released in early October, painted a more measured picture than many agents gave.
The average villa landlord asked for 14.1 per cent more in rent in the third quarter this year than they did in the same period in 2020, while the average apartment rent rose by only 2.6 per cent.
Average prices were significantly more affordable than during the sharp increase recorded in 2013 to 2014, after Dubai won its Expo 2020 bid, ValuStrat said.
What about supply of new units?
New residential supply slowed in the third quarter compared to the second quarter – in particular in the villa market, which Asteco says received only 100 new units across the three-month period. The number of completed apartments was about 3,600.
Another 9,300 apartments and villas are expected for handover by year end, with the majority of this supply being attributed to the Azizi Riviera development.
“New project launches [off-plan, under construction and completed developments] continued to be well received by investors and end users despite recurring oversupply concerns,” it said.
“Government initiatives and the Expo 2020, which started in October 2021, are likely to encourage further releases.”
Have Dubai property sale prices been rising?
Sales transactions rose 80.4 per cent annually in November as the emirate registered 7,000 sales deals worth Dh17.96 billion ($4.89bn) last month, making it the best November in terms of total sales in eight years, according to Property Finder.
Sales transactions were also 45 per cent higher when compared with November 2019, before the start of the pandemic.
Residential property prices in Dubai jumped 21 per cent in the first 10 months of the year to Dh1,235 per square foot, Knight Frank said last month.
Dubai, the commercial and tourism centre of the Middle East, recorded 55,651 sales transactions worth Dh135.4bn in the first 11 months of this year, up 88.39 per cent compared with the whole of 2020.
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