Over the years Dubai real estate market has witnessed a number of different trends that have played out to be major factors in the in direction of the market. Dubai real estate market shows that during 2019, residential property prices fell by 4.05 % which was an improvement from previous year-on-year declines of 8 % in 2018 and 5.2 % in 2017.
During the first 2 months of 2020 according to Property Finder, Dubai real estate market witnessed strong property transactions volumes, overall showing that transactions were up and grew 12 % year-on-year during January and 33 % in February. While there was promising growth in the Dubai real estate market we also seen off-plan transactions jump incredibly by 76 %. The top 5 performing areas in Dubai were Business Bay (149), Downtown Burj Khalifa (144), Mohammed bin Rashid City (120), Jumeirah Village Circle (88) and Palm Jumeirah (70).
Recent transactional data suggests that to date, up to 50 per cent of buyers are non-residents which underscores the fact that a large proportion of the UAE’s residential community has not yet directly invested in the property market. Due to the United Arab Emirates recent tightening on travel restrictions the reality is that it’s clear due to the Covid-19 outbreak there will be some downside to the Dubai real estate market. The severity of the impact on Dubai’s real estate sector is something that we cannot predict as it depends on the duration of the Covid-19 outbreak and the extent of government restriction measures.
While many have likened the current coronavirus pandemic to the global financial crash in 2008, we are offering up a more optimistic outlook amid all the doom and gloom in Dubai real estate market. With lower interest rates and the ease of regulations on mortgage payments the secondary market in Dubai will remain busy. We will also see attractive interest rates and the favourable loan-to-value ratio due to the increase of five percentage points for first-time buyers. This is expected to improve affordability in secondary sales mortgage market. For sure this will show an increase of opportunistic purchasers as they will be expected to take advantage of further drop in sales prices in this period of reduced liquidity.
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