Dubai's economy for the first six months of 2021
The rental prices for apartments have dropped by 18.4% compared to the same period in previous year. However, on the contrary, rents for townhouses and villas have increased by 3.9%. The average annual rental price for a two-bedroom villa has been recorded as AED 130,000 and three and four-bedroom villa rentals ranged between AED 150,000 to AED 210,000 respectively. Annual rental prices for studios were AED 35,000, one-bedroom apartments – AED 52,000, two-bedroom apartments – AED 78,000 and three-bedrooms – AED 114,000.
Dubai's economy was heavily impacted by the COVID-19 pandemic, like all other countries, as real estate prices and the overall demand for property dropped in 2020. During the first quarter of 2019 to the first quarter of 2020, the average apartment prices in Dubai lowered by 12%, whilst the average price for villas and townhouses decreased by 4%.
Real estate consultancy ValuStrat said in their recent report that in the first quarter of Dubai's property market of 2021 it had registered the highest number of housing sales since 2010. According to ValuStrat, over 6,000 completed properties with a total value of AED 13.5 billion and 3,600 off-plan properties worth AED 5 billion were registered in the first quarter of 2021. The total volume of ready property sales increased by an annual rate of 76.1%, which is 17.4% higher compared with 2020, while off-plan property sales decreased by 30.2%, which is still 8.9% higher than in the previous year.
The increased popularity of villas and townhouses, have demonstrated that freehold villa areas have seen improvement in capital values since the first quarter of 2020, ranging between 1.8% and 5.4%. As for apartments, only 50% of areas have shown a value increase and some areas have seen decreases of up to 2.8%. According to ValuStrat, the best results in freehold areas have been recorded in Arabian Ranches, Dubai International City, The Lakes, The Meadows and Palm Jumeirah.
Offers and Promotions in 2021
From December 21 to January 30, DAMAC Properties were offering discounted prices on their apartments in Damac Hills and completed villas in Akoya Oxygen. The starting price for a villa in Akoya Oxygen was AED 1.1 million and AED 450,000 for an apartment. In addition, the developer offered to pay buyers' interests and fees for ten years.
Majid Al Futtaim offers advantageous payment plans on their Aura Villas in Tilal Al Ghaf — only 40% over two years. The offer is valid until June 30, 2021.
Until July 31, 2021 Sobha Realty offers a 50% DLD waiver on their Waves apartments in Sobha Hartland, in addition to two years of service charges waivers.
Ramadan Offers
During Ramadan (a holy month of fasting, introspection and prayer for Muslims, the followers of Islam), developers in Dubai offer different kinds of promotions on their properties for sale, including discounts of up to 20%. For instance, from April 12 to May 12, Azizi Developments was offering a guaranteed 10%-ROI for three years on its Al Furjan, Dubai Healthcare City and MBR City projects. The starting prices on these projects were also decreased by up to 18%. Tizian Raab, spokesperson at Azizi Developments, said "Average sales per day have been almost three-fold since April 12 - so far it's been a success".
Growth Prospects, the Government's Plans for Development, Experts' Forecasts
Dubai will continue to pursue goals of the Vision 2021 Programme which aims to put the UAE in line among the world's best countries. The government will also continue to elevate Dubai into a "global platform for knowledge-based, sustainable, and innovation-focused businesses", which is a part of Sheikh Mohammed bin Rashid Al Maktoum's Dubai Industrial Strategy 2030.
Expo 2020, which was postponed due to the pandemic, will be held from 1 October 2021 to 31 March 2022. This will drastically increase medium- and long-term rentals, as well as attract more investments for the economy in general, and in particular in Dubai's property.
The Reuters poll of ten analysts forecasts an increase of 1.1% in housing prices this year and another 2.8% in the next year. This is quite the opposite of what most experts said at the beginning of 2021, when prices were forecasted to decrease by 2% in both 2021 and 2022.
Conclusion
- Dubai's current property market reports confirmed the optimistic expectations of most of the analysts and property experts considering the year of 2021.
- Low prices and increased demand in spacious types of property caused by the necessity of working remotely from home have boosted property sales transactions in Dubai.
- The establishment of free economic zones attracted many investors from all over the world.
- The authorities will continue to pursue their goals regarding the future of the UAE's economy by further diversification and heavily investing in tourism and service sectors.
- The upcoming Expo 2020 scheduled for 1 October 2021 will also contribute a lot in the local economy by attracting more potential residents and investors.
