Dubai: Demand from investors and end-users helped the Dubai property market record its best sales transaction figures since 2009, totaling MAD 151.07 billion for the past year. In 2009, Dubai recorded its highest-ever real estate turnover, totaling more than 155 billion dirhams, according to data from Property Finder. (In 2020, sales barely exceeded the 70 billion Dh mark.)
End-user demand has been the most important factor driving property sales, with almost 60% of transactions involving homes that are ready-made or purchased on the secondary market. Offplan made up the rest of the sales, as Dubai developers were busy in the last three months of 2021 with new launches.
More price hikes?
On the luxury market side, buyers have to pay between 15 and 25% more than they would have if they had bought in 2019-20. This could get worse as the supply of available high-end homes dries up. “Investor sentiment remains strong, demand is still very high and supply is shrinking,” said Lynnette Sacchetto, director of research and data at Property Finder. “This has put upward pressure on prices as they continue to rise and will most likely continue into the first half of 2022.”
The Expo delivers
Since the start of the Expo on October 1, the Dubai property market has totaled 17,942 sales transactions worth Dh46.75 billion. This is the highest volume and value the Dubai property market has traded for a quarter in over 8 years.
Out of plane picks up
Q4 sales deals will further incentivize developers to restart launches. Between the fourth and third quarters, Dubai saw a 14.53% increase in off-plan home sales as investors shift back into buying mode. In comparison, sales of off-the-shelf and second-market offerings increased by 11.22%.
More relevant to developers is the fact that the value of off-plan sales increased by 25.38%, suggesting that more expensive units are in demand. It could also be that developers gradually increase their asking prices – and get buyers despite it. The mood for bargains and incentives is gone.
“Despite the fact that many decided to travel for the first time in over a year over the holidays, the fourth quarter did not appear to see a slowdown in business transactions,” Sacchetto said.