The recent Knight Frank Global Buyer Survey on buyer attitudes highlighted that the main reason for buying property was upgrading the family’s primary residence, followed by access to healthcare, holiday home purposes and then, business or employment.
Buyers who are looking abroad to buy a holiday home said the government’s handling of the Covid-19 crisis would determine if the country ranked higher for them. The survey indicated countries such as Germany, Austria, Greece, the UAE, Singapore and New Zealand, are likely to rank higher among second home buyers.
From the beginning of 2020 till September, Dubai has seen approximately 21,500 new units in the market, getting the total residential stock tally to 571,500 units. In the final quarter of 2020, approximately 10,500 units are expected to be handed over to buyers.
Based on the recent Dubai Residential Report from Chestertons, although Q3 saw a clear rise in sales, the Dubai real estate market is expected to face more challenges going ahead. Increased sales activity, which grew by 50 per cent QoQ, was largely due to the backlog demand from Q2, along with developer promotions offered to clear unsold ready inventory. Total transaction volume was down 21.7 per cent from Q3 last year. It is expected that both prices and rents will face further downward pressure over the final quarter. Market performance looks likely to be hampered by the ongoing economic impact of Covid-19 and the likely reduction in Dubai’s population.
Buying trends among investors and end users of Dubai real estate
Sustained price drops in the market have piqued investor interest, looking benefit from the ongoing market conditions in this time of reduced liquidity.
Investors prefer smaller unit sizes, such as studios, one beds and two beds apartments and villas, because of lower entry points and higher yields compared to larger apartments/ villas. These also have low service and maintenance costs. There will always be a market for small apartments. Investors are also targeting ready townhouses and villas in established communities like Emirates Living, Palm Jumeirah, and Arabian Ranches.
First-time buyers of property and end users have a stronger interest in ready-built apartment and villas to accommodate growing family requirements, in order to transition from renting to owning as a form of long-term saving, due to attractive entry level pricing and easy access to finance.