Dubai property market growth in the second half of 2021
Statistics
The latest data from the Property Finder portal showed that in the first half of 2021, there were 27,373 transactions in Dubai, worth AED 61.97 billion. This is compared to the 35,041 sales and purchases of AED 71.87 billion recorded in 2020, which represents the best performance in real estate in terms of value. sales transactions over the past eight years.
Growth reasons
Shopping sentiment in Dubai has improved as the world has noticed how effectively the emirate has dealt with the Covid-19 situation. This has led many luxury buyers to view Dubai as an investment destination. Dubai has faced many regional and international shoppers moving into the city for the luxury segment due to attractive prices and tight control over the pandemic. Dubai is experiencing a historic time for the luxury segment.
Low interest rates have turned many tenants into buyers.
The growth is due to the fact that many people prefer villas to apartments due to their new routine of working from home and the need for large areas, green spaces and amenities. There is also an increase in demand for real estate by the sea.
So, highlighting the five main factors of real estate growth in 2021, it can be noted:
1. High level of vaccination in the UAE
2. Security and business continuity for businesses and residents
3. Relatively easy access to finance - lower interest rates, making it easier to climb the career ladder
4. Visas and social reforms
5. Lots of fiscal incentives and government measures to support the economy.
And the positive economic sentiment associated with Expo 2020 will further strengthen market sentiment.
Forecasts
Experts believe that the Dubai real estate sector will maintain a positive momentum in the second half of 2021, as visa reforms, a successful Covid-19 vaccination plan and government measures to support the economy will stimulate demand and manage excess supply.
Analysts and experts say the villa segment is buying up better than apartments, and the positive sentiment will drive property prices up to five percent between July and December this year. This is most likely due to the overall positive market sentiment following the measures taken by the government to stimulate the growth of demand for housing, as well as the management of excess supply. An excellent nationwide vaccination program has further bolstered market sentiment.
The first half of 2021 performed well as the market recovered. However, moderate growth is expected in the second half of the year, and we expect prices to rise by 3-5% city-wide from the first half to July-December 2021.
Despite the high vaccination rate due to the very nature of the pandemic and its ever-changing impact on global tourism and mobilization, it is not yet possible to say with certainty that Dubai is in a phase of sustainable recovery. However, with strong fundamentals, business resilience and investment interest, most market participants maintain positive market sentiment and remain cautiously optimistic about a stable 2021 amid effective government measures.
S&P Global recently shared positive reviews of Dubai real estate and is forecasting more than 30% revenue growth in 2021 amid favorable real estate market trends and a gradual recovery in other business segments.
"We expect Dubai's GDP to grow by about 3.5% in 2021, followed by 2.5% growth in 2022," S&P analysts said.
