Prime residential market shows strong recovery in Q3 2020
More than 2,297 apartments and 438 villas were transacted during Q3 2020 in the Dubai prime residential market, marking a 24% increase in the overall number of units sold quarter-on-quarter based on data from the Dubai Land Department.
The total volume of transactions in the prime residential market climbed 49% QoQ to $2bn (AED7.4bn) in Q3 2020, compared to $1.36bn (AED5bn) in Q2 2020.
There has also been a 10% correction in price per sqft in AED across the prime residential market from $361 (AED1,327) to $325 (AED1,194), indicating positive levels of recovery and a strong surge in buyer activity.
The areas used for the analysis of Dubai’s prime residential market included Al Barari, Arabian Ranches, Downtown Dubai, Dubai Marina, Business Bay, Emirates Living, Jumeirah, Jumeirah Beach Residence, Mohammed bin Rashid City, Jumeirah Golf Estates, Jumeirah Islands, Jumeirah Lake Towers, and Palm Jumeirah.
The top three areas in terms of sales volume were MBR City, Downtown Dubai, and Palm Jumeirah. The Jumeirah Islands area showed the highest growth of sales at $19.85m (AED72.9m), which is 24 times higher than the previous quarter, followed by Al Barari with 5x growth in sales at $17.5m (AED64.3m) and Jumeirah with 3x growth in sales at $53.6m (AED197m).
The data is indicative that due to the on-going COVID-19 pandemic, many are opting for homes and villas with larger spaces, outdoor areas, and pools. The sales of villas doubled from 203 villas sold in Q2 2020 and 265 villas sold in Q1 2020 to 438 villas sold in Q3 2020.
“Being forced to spend more time at home due to the current COVID-19 pandemic has certainly demonstrated that people have been looking for more space to occupy.
“We have seen the demand rise for townhouses and villas as they are more appealing to end-users; especially those properties with good outdoor spaces and swimming pools. Palm Jumeirah, MBR City District 1, Arabian Ranches, Al Barari, and Dubai Hills Estate amongst others have witnessed a significant spike in interest from end-users.
Secondary Market
The secondary prime residential market has doubled in sales volume quarter-on-quarter. The volume of transactions in the secondary market was (AED6bn) in Q3, compared to (AED2.7bn) in Q2 2020.
There also has been a price correction of 12%, from $318 (AED1,169) in Q2 2020 to $280 (AED 1,028) in Q3 2020 for the average price/sqft transacted.
The number of apartments sold in the secondary market doubled quarter-on-quarter from 520 apartments sold in Q2 to 1,177 sold in Q3 of 2020, while the number of villas sold nearly doubled from 188 villas sold in Q2 to 418 villas sold in Q3 2020.
The average price of an apartment in the secondary prime residential market is now $490,000 (AED1.8m) and a villa is $1.63m (AED6m).
“As the off-plan segment hasn’t been able to absorb the capital with enough new releases, cash is diverted to the most stable secondary property markets and we have seen a big increase in the prime residential markets.
“This will only strengthen further as Dubai will play a key role in the post-pandemic scenario. The UAE will attract a significant influx of ex-pats as well as capital mainly because of how it has handled the pandemic issue on a global level while keeping the economy open.
“This has helped with a positive and sustainable image worldwide and will surely help in recovering the industries in the near future.”
“Add this to the fact that banks are currently offering low fixed-rate mortgages as well as higher loan to value rates. This has triggered a flurry of first-time buyer purchases as buyers now see the long-term benefits of owning as opposed to renting.”