Real estate transactions in Dubai jumped 197 per cent annually in May as its economy continued to recover from the coronavirus pandemic-induced slowdown, according to the emirate’s land department.
Total real estate transactions during the month reached Dh21.8 billion ($5.93bn), the Dubai Land Department said on Thursday. Sales transactions made up Dh11.03bn of this, mortgage deals Dh6.52bn and gift transactions Dh4.11bn, according to the DLD's website. The huge spike this month is also due to a quieter period last year when movement restrictions to stem the pandemic's spread were in place.
“Dubai's real estate sector has continuously proven its attractiveness to investment and its flexibility in adapting to various developments, thanks to the legislative environment and infrastructure,” the DLD said in a statement.
These had "a clear impact on the results achieved in the sector during the past months, specifically since the beginning of this year, and contributed to strengthening the emirate's global position as a preferred real estate investment destination", it added.
The total transactions during the month stood at 6,021, including 5,359 sales transactions.
The UAE's property market softened in the wake of a three-year oil price slump that began in 2014 and subsequent oversupply concerns but is now showing signs of a revival as end-users look to upgrade to larger spaces amid a rise in remote working and learning due to the pandemic.
Economic support measures and government initiatives, including visas for expatriate retirees, remote workers and the expansion of the 10-year golden visa scheme, have also helped to improve sentiment. Since the beginning of the year, Dubai recorded real estate investments worth Dh36bn, up 44 per cent over the same period last year, according to the DLD.
The most popular areas in terms of villa sales transactions were Hadaeq Sheikh Mohammed Bin Rashid, a development by Meydan in Nad Al Sheba, followed by Wadi Al Safa 5, Wadi Al Safa 7, Al Thanyah Fourth and Palm Jumeirah.
In terms of apartment sales, Dubai Marina, Burj Khalifa, Palm Jumeirah, Business Bay and Al Thanyah Fifth were the most active areas last month, according to DLD's report.
“It is expected that the real estate sector will witness increased growth and a greater recovery in the coming period, with the fast-approaching date of Expo 2020, which in turn will attract tourists and visitors from around the world and constitute a great opportunity for the real estate sector to strengthen its position regionally and globally,” the DLD said.
Dubai's biggest listed property developer Emaar Properties recorded a 250 per cent jump in property sales in the first five months of 2021 to Dh10.5bn.
“The globally synched post-pandemic migration to larger homes is reigniting Dubai’s residential property market,” HSBC analysts said in a note earlier this week.
“The property sales rebound in Dubai has been remarkable, with Emaar recently reporting sales up 250 per cent in the first five months of 2021, which annualised would make 2021 a record year,” it added. HSBC's analysts upgraded Emaar Properties to a 'buy' recommendation, from 'hold', setting a new target price of Dh5.20 (from Dh3.83).
The company's shares closed at Dh4.11 on Thursday, up 16 per cent so far this year.
"Based on quarterly trends, it really has been the last two (and at the end of this month likely three) quarters that have seen the pivot to price appreciation," HSBC's analysts said.
Higher transaction levels are being driven by investors reducing the supply overhang by selling off existing properties, as opposed to launching new schemes, they added.
"Inventory clearance (versus off-plan sales) has featured strongly in the last two quarters."