Dubai’s success in handling the Covid-19 pandemic and its proactive policy measures to revive the economy have boosted demand for real estate, increasing the capital value of prime houses in the emirate.
The value of residential capital grew 4.2% in the first half of 2021 thanks to the availability of good-quality inventory at affordable prices and strong transaction activity, according to a report by global real estate consultancy Savills.
“The return of international travel is likely to provide an increased supply of buyers for prime properties,” said Swapnil Pillai, associate director of research at Savills Middle East.
“The economic recovery and growth, led by [an] the increase in the vaccination rate in the United Arab Emirates is expected to boost buyer confidence and stimulate demand. While some degree of pandemic uncertainty remains, the blue chip residential sector is expected to remain strong for the remainder of the year. “
Despite the lingering uncertainty caused by the pandemic, 30 real estate markets in the Savills World Index have held up well, with capital value rising an average 3.9% over the six-month period, the fastest growing rate since December 2016, according to the consulting firm.
Dubai, the shopping and travel hub of the Middle East, was ranked 11th in terms of capital appreciation, with Shanghai topping the charts, followed by another Chinese city, Hangzhou. The US cities of Los Angeles and Miami occupied third and fourth places, respectively.
Moscow, Seoul and Lisbon were also in the top 10 of global markets that recorded considerable capital appreciation in the first half of the year, according to the report.
“With closed offices and the concept of working from home in full bloom, the resulting increased need for space has helped to increase the value of capital in places such as Dubai, Cape Town, Moscow and Lisbon,” said said Savills.
“At the same time, transaction volumes are increasing compared to the first half of 2020, when many cities were completely stranded. “
The UAE’s real estate market – which has weakened due to a three-year drop in oil prices that began in 2014, oversupply issues and the pandemic – is rebounding strongly.
People moving to larger homes with outdoor amenities have driven demand amid increased work and distance learning.
Economic support measures and government initiatives – such as residence permits for retirees and remote workers and the extension of the 10-year golden visa program – have also helped improve investor sentiment.
Dubai’s main residential market saw a 43.8% increase in sales volume in the second quarter of 2021, compared to the previous quarter, according to Luxhabitat Sotheby’s International Realty report, which cites data from the Dubai Land Department.
Total sales during the period included 4,681 apartments and 818 villas valued at 16.7 billion dirhams ($ 4.54 billion).
Overall Dubai property prices rose 15% in July alone, with the average price in the emirate hitting Dh94 per square foot ($ 256), up from Dh818 per square foot in the same period. last year, said Property Monitor.
Prices rose 1.9% month-on-month in July and have climbed 11.8% this year, reflecting the global trend as the world recovers from the downturn caused by the pandemic, according to its monthly market report.
Update: Aug 17, 2021, 6:16 a.m.