Off-plan sector in Dubai escaped COVID-19 crisis
The ease of restrictions initiated by the government in light of the COVID-19 pandemic has positively impacted the real estate sector in Dubai, but the emirate’s off-plan sector has remained untouched by the crisis, according to Lynnette Abad, director of research and data at Property Finder.
A total of 2,327 units valued at AED4.72 billion ($1.29bn) were sold in June 2020, while off-plan sales stood at 1,072 units worth AED1.36bn ($370.27m).
“The off-plan sector has not really been affected by the crisis, if anything there were delays in transfers of properties due to the lockdown, but otherwise the transaction levels stayed consistent with over 1,000 transactions month-on-month.”
Apartments sold within off-plan developments included 940 units, with the top five performing areas being Mohammed bin Rashid City (18.2 percent); Jumeirah Village Circle (13.6 percent); Downtown Dubai (10.7 percent); Business Bay (9.8 percent); and International City (7.7 percent).
Meanwhile, among villa/townhouses, there were 154 off-plan units sold. Dubai South topped with 49.4 percent, followed by Dubai Hills Estate (11.7 percent), Dubailand (11 percent), Arabian Ranches 3 (10.4 percent) and Arabian Ranches 2 (9.7 percent).
“We saw a significant increase in searches and enquiries on Property Finder, especially for villa/townhouses. We also saw the same trend with mortgage enquiries,”
“With interest rates being at an all-time low, the increase in the mortgage cap, a large selection of stock and extremely attractive prices and deals, we are seeing residents seriously looking to buy,” Abad added.
Outlook for Q3 2020
Trends from H2 2019 into Q1 2020 showed that transactions were increasing month-on-month, although this was halted by the onset of the coronavirus pandemic, with the lowest amount of transactions recorded at the end of May.
“However, in June, we saw a 64 percent increase in residential sales transactions compared to May.”
Property Finder expects summer months to be a busy period for the real estate sector in Dubai, as most people will not be travelling for holidays, as a result of the COVID-19 movement restrictions and associated guidelines.
"June was a great month for residential sales and was at pre-COVID transaction levels. Based on property and mortgage demand data, I expect that Q3 should more or less follow suit.
"It’s too early to comment on what to expect in Q4 as we don’t know where the state of the crisis will be, however if things remain the same as they are now, Q4 will most likely follow the same trend."