The main reasons behind the decline were; over-supply of properties, an inflated market, and a weak economy. The outbreak of Covid-19 is adding to the strain on Dubai's already weak real estate market. The data for the first three quarters of 2018 were not promising. Your recommendation is to look elsewhere as there are plenty of better options around Asia. face a tough time throughout 2021 and 2022, Dubai’s Property Market in Previous Years, Dubai’s Property Market in 2020 / The COVID-19 Pandemic. But the real estate market will most likely remain weak. Read hundreds of articles and expert interviews covering Asia property taxes, foreign ownership rules, projects & much more. / Marcus, How would you advise someone like me that has already bought a (hotel) apartment that is being rented out via a pool? For example, the average sales price decreased by around -5.6% in 2017 according to Savills, while the average rents fell by -7%. The market also tumbled from 2014 to 2015. Take a look at the Dubai real estate market’s yearly overview. The Dubai real estate market has, therefore, grown by 260 per cent in the past 11 years in terms of the volume of transactions. Many Buildings built half way and abandoned including offplan units not materialized. The Dubai government opened up the city to tourists and flights started coming in since the first week of July. • The apartments sales and rental prices have continued to soften in the third quarter of 2020. During 2018 both import and export trade volumes grew whilst rental rates for warehouses saw steady growth. The second highest number of property sales transactions registered in Dubai since 2008 was in 2017 (40,649). I accept that this form collects my name, email and other information that may be forwarded to a real estate agency or other relevant agency (read our. This positive, upward momentum is expected to carry forward into the Dubai real estate market in 2020, creating many exciting opportunities for buyers and investors. Dubai‘s economy remains weak and even contracted in 2020. We are a trusted team of Audit and Valuation professionals, operating in the Middle East. Going back to the start of the year, in January and February of 2020, Dubai’s property market saw month-on-month increases in real estate transactions following similar trends from H2 2019. Save my name, email, and website in this browser for the next time I comment. • The total residential real estate … Although the market is broadly stable, 2018 saw a marginal 4% decline in pricing. The Dubai property market will most likely remain weak throughout 2021 as it will recover from the COVID-19 pandemic and still struggles with an oversupply. Serving as Managing Director at PH Real Estate, Nick's property-centric career has spanned more than twenty years, Having previously managed capital transactions within London, Sydney and Dubai, he has developed an understanding of the nuances required to successfully negotiate and broker real estate within vastly differing market places and with a multitude of … Worth mentioning is that Dubai’s economy is extremely vulnerable to external factors and the global economy as a whole, including the ongoing trade war between the US and China. Dubai’s housing market remains “oversupplied” despite the drop in prices over the last few years, a new report by investment firm UBS Global Wealth Management has found. Office. He is currently a freelance consultant supporting Asiaimportal (HK) Limited with content creation and research. Thank you Wayn! • Villa transactions increased by over 123% in the third quarter in terms of volume and around 91% in value due to high availability and lowered prices, villas are becoming more popular for both aspiring homeowners and investors alike. From January to November that same year, the Indian- and Pakistani Rupee weakened by around -14% and -17% respectively against the Dirham, reducing the purchasing power among these nationalities. Dubai's real estate market showing signs of recovery, say experts. What are your preferences and goals? The Dubai property market outlook is what you should be referring to get a projected view for a successful investment in Dubai. I’m glad you liked it. It shows all the data including project delivery, property launch, overdue projects, future supply, delivered units, … Although Dubai’s real estate market has developed a positive outlook ahead of the Expo 2020, the onset of coronavirus has slowed down its growth. This trend will continue through 2020. If you plan to buy real estate in Dubai, you must know how healthy the market is and what you can expect for the coming year. Read: Government initiatives to support Dubai’s real estate market in 2020: CBRE report. Agreed, it’s indeed oversupply vs demand. Level of supply will mean Dubai property prices may not recover over the course of this year, according to experts. The economy is still weak and we see remaining issues with an over-supply of property. In this article, we review how the market has behaved in previous years, present data and statistics, and share what we expect for 2021. We use cookies to ensure that we give you the best experience on our website. Nick Grassick. One of the biggest real estate developers, Damac Properties PJSC, believes that Dubai will still face a tough time throughout 2021 and 2022 due to the effects of the coronavirus, which drags down property prices. Disclaimer: We don’t offer any kind of insurance or compensation, due to losses caused by the agency, developer, banks, government or any other party that may be involved in the buying process. Officials have ruled out any possible slowdown in Dubai’s real estate market because of the, now, more flexible laws and regulations of property ownership in Dubai. The estate agents have so far not provided me with the best advice . Dubai real estate market recovery to be seen as of 2022: S&P S&P Global forecast Dubai’s real estate market to fall by between 5 and 10 percent this year. Since 2017, developers have been shifting from building high-end luxury developments to more affordable properties. According to a poll made by Reuters, the real estate market will continue to decline until 2022. Thanks. This may increase business activity and the demand for property in the coming years. Even if oil contributes to only 5% of Dubai’s economy, it has a great impact on the economy as a whole. With all the years in the making, the Dubai real estate market now compares closely to leading real estate markets of the world. According to ValuStrat, apartment prices fell by as much as -14.9% in Downtown Dubai in November, year-on-year. Although off-plan transactions stayed relatively stable and only declined by 2%, it is the secondary market transactions that performed really well in the third quarter and increased by 141% when compared to the previous quarter. Over the course of 2020, the trend of consolidation and a flight to quality is likely to continue across the UAE, driven by softer market conditions and regulatory changes, such as the 100% foreign ownership law and dual licencing. The goal is to turn renters into buyers and to create more demand from the medium income segment of the market. • The total residential real estate transactions increased by 50% in the third quarter of 2020 when compared to the previous quarter. Required fields are marked *. The Dubai government opened up the city to tourists and flights started coming in since the first week of July. The UAE economy started showing signs of recovery at the beginning of the third quarter of 2020. The 10-years residency visa is also valid for specialists like engineers, doctors, and top students. While large developers like Emaar aims to curb the supply of new units, we will still see the launch of more than 50,000 units in 2021. While the economy contracted by around -6% in 2020, rents decreased by around -6.9% in the third quarter of 2020. Some claim that the decline of just -0.9% in the third quarter shows signs of improvement in the market. Prices will most likely continue to fall modestly throughout 2021. Property prices fell by -0.9% during the same quarter compared to a year earlier. As expats make up 89% of Dubai’s population, the mortgage cap affected a big part of the consumer market. This even pushed the government to create the so+called Higher Committee of Real Estate to manage the supply and demand. Jumeirah Village Circle with 1,323 transactions, Dubai Creek Harbour with 1,214 transactions, In Q2 2018, there was a -5.5% decline in sales price for apartments and a 6.8% decline for villas, compared to 2017, In Q2 2018, there was a -7.9% decline in rents for apartments and an 11.2% decline for villas, In Q3 2018, there was a -7% decline in sales prices for apartments and an 8% decline for villas, In Q3 2018, there was a -10% decline in rents for apartments and a 9% decline for villas, Apartment prices fell by -16.5% when comparing Q3 2018 with Q3 2019, Villa/townhouse prices declined by -15% in the third quarter of 2019. Our off-plan specialist Nima Safa writes about the most important trends he has noticed in Dubai’s real estate sector. In Dubai, the market has witnessed a shift in demand for larger homes and more private spaces. Many analysts working in Dubai’s real estate market claim that the mortgage cap is the biggest contributor to the price drop. The number of real estate transactions declined much compared to 2017. 2019 had been an interesting year for the Dubai real estate market, which saw an increase in real estate transactions, worth a staggering AED 81.03B, as per data from the Dubai Land Department. Indians and Pakistanis were the second and fourth biggest investors in Dubai respectively during the first nine months of 2018. Marcus is a Swedish Engineer and previously worked as a Sales Manager within the Automotive industry in Shanghai. Some of the main issues can be pointed to oversupply, a fading demand, a weak economy, and a strong local currency (AED). Compare 23,215 properties listed for sale in Dubai on the most popular real estate portal in the United Arab Emirates. The average residential prices in the first quarter of 2018 was also 7.2% less than that of in the 1st quarter of 2017, according to Savills. Oil is the primary export product of the UAE and the drop in oil prices has indeed affected the market negatively. The quarterly decline of apartment sales prices has been 2.6% while for rentals it has been 4.5%. Property Monitor offers information about the latest developments in the real estate market. You can find many developers that now offer so-called multi-layer payment plans. Fill in the form to get connected with a real estate agent in Vietnam, Malaysia, Thailand or other countries. But this is fairly beneficial to homebuyers and investors as they will reap good returns after market rebound. Dubai will most likely see modest price declines throughout 2021 and with the market bottoming out. Click here to get in touch with an experienced agent. That’s a steep discount from Tel Aviv, where the price per square meter is $17,149. • In the third quarter we saw an inverse change in the apartment transactions in terms of volume as individuals are finding it easier to buy homes due to reduced prices. Dubai flourishing economy has led to a leap in its real estate market. However, since we’ve seen a decreased interest and demand among wealthy investors, developers now focus more on affordable residential units. Abu Dhabi Real Estate Market Report Q2 2020. The softening of the Dubai real estate market has prompted buyers and investors to rethink investing strategies. There are plenty of reasons for this, particularly its oversupply. Dubai Real Estate Market Report Q3 2020 The UAE economy started showing signs of recovery at the beginning of the third quarter of 2020. In 2018, S&P Global Ratings informed that real estate prices will … Worth mentioning is also that saw a significant decline in real estate transactions during the first three quarters of 2018. The Dubai property market will continue its downward trajectory and prices will most likely fall until 2021 or 2022. Prices have decreased by more than -30% in Dubai since 2014, which was triggered by the high supply. After the mortgage cap was introduced in 2013, we saw an immediate decline in prices. While occupancy rates across Dubai's hotels remained relatively stable at 85% in the year-to- February 2019, average daily room rates and revenue per available room continued to decrease on the back of increased supply. How will Dubai’s property market perform in 2021? Learn how Asian countries compare on foreign property ownership rules, taxes, visa options, capital controls and more. Many investors have trusted this growing emirate which led to maturity in the real estate market. In the first nine months of 2018, the total number of transactions was 39,802 with a total value of AED 162 billion. The government also decided to widen the eligibility for its 10-years Golden Visa. Dubai property transaction volumes in 2019 increased by 22 percent compared to 2018. With that said, Dubai’s property market has not performed that well in the past years. Predictions for Dubai Real Estate Market in 2021 | Real Estate Your email address will not be published. • The office prices have declined by 2.4% in the third quarter of 2020 when compared to the previous quarter. Property is still considered fairly expensive, a reason why we see a correction in the market. On this report, you will identify the flow of property supply in the Dubai’s market. According to the latest 2020 Frank Knight report, the impact of the COVID pandemic across the GCC countries has caused some changes in their economic policies to support businesses and property investments this year. In 2019, the UAE government announced a 10-year residency visa for investors, as well as offering 100% foreign ownership of UAE-based companies. Areas like Downtown Dubai are worst affected by the oversupply. (Reuters) Dubai Real Estate has created a long-term health in terms of the availability of units in the market. Deloitte’s sixth annual Middle East Real Estate Predictions 2020 report examines the performance of Dubai’s real estate market in 2019 and forecasts the changes in the hospitality, residential, office, retail and industrial and logistics markets in 2020. Copyright @ 2019 Reliant Surveyors All Rights Reserved. In October, we saw record-high sales volumes due to decreasing prices, which made property more attractive to local and foreign investors. Visit us to know the Dubai real estate statistics & property market trends, now. Should I sell now or hold on for a few years? At the moment I’m writing this article, local Emiratis need to pay 20% in down payments, while the limit is set at 25% for expats and other foreigners. Promote your Asia properties or pre-construction projects via our website and email list. We have provided valuable consultancy solutions to businesses of all shapes and sizes. It’s been popular among overseas investors and the real estate market grew remarkably throughout the 2000s. This makes Dubai property more expensive for investors who come from China and Pakistan, for example. Last year, it was reported that Dubai’s real estate market will stabilise in 2020. In 2017, the number of transactions during the same period was 52,170 with a total value of AED 204 billion. Some even allow buyers to pay 60% of the purchase price after completion. Thanks for this – it provides many useful points! Established in 1977, Reliant Surveyors are a Loss Adjusting and Valuation Company. However, since July 2020, the Dirham lost around -10% to the RMB, for example. While the Indian Rupee has remained fairly stable to the Dirham, the Pakistani Rupee has lost around -50% of its value to the Dirham from early 2018 to early 2020. Prices and rents didn’t fall as much these years compared to the previous years. Below I’ve included additional information from reports covering Q2-Q3 2018, written by JLL: In 2019, we also saw major price drops as follows: At the same time, rents have declined by double digits. The market was then in a recovery mode from 2017 to 2018. While some believe that the market has already bottomed out as we’ve seen major price decreases since 2014, major players like Damar aren’t that certain. Do you plan to buy property in Dubai? • The sales prices of the villa segment have not been affected as much due to increased demand, in fact there has been an uptick of 0.1% in the prices when compared to the previous quarter. Get all information about Dubai Real Estate market including sales volume, sales value, price change in all areas of September 2020 and more. Analysts believe that the economy will rebound in 2021 as there is the 50-year anniversary of the UAE and we will also see the Dubai Expo. When it comes to locations, the three most popular areas in the first six months of 2018 were: During the first eight months of 2019, the most popular areas were: The latest news for the office sector are not promising either as the vacancy rates increased by 10% in the second and third quarter of 2018. It was really complete and realistic analytics on Dubai real estate market, which cover all essential parameters. In 2004-2006, this small city had 30,000 cranes, equal to 25% of all cranes in the world, which I believe is self-explanatory. A fundamental shift in patterns of occupation is expected in 2019, with changes to ownership regulations anticipated. Optional: Receive free information about projects in Vietnam, Optional: Receive free information about projects in Thailand, Dubai Real Estate Market Outlook in 2021: A Complete Overview. The market has been turbulent since mid-2013 and had some of its worst years from 2015 to 2016 when real estate prices declined significantly. As the Dirham is pegged to the US dollar, we’ve only seen minor fluctuations between the two. Where in Asia? We created it for investors to discuss and raise questions like yours: https://www.facebook.com/groups/asiapropertyhq. Explore, find and gauge the market health using the latest home price trends and indices for sale and rental properties in UAE using Bayut.com’s exclusive home value indices. For those who want to invest in Dubai property, my recommendation is to look elsewhere as there are plenty of better options around Asia for 2021. It’s definitely not a place for investors unless living in it. Middle East Real Estate Predictions Dubai 2020. Any sincere advice would be appreciated. • A total of 8,991 residential units were added to the market in the third quarter of 2020 bringing the total supply added in the year 2020 to 24,009 units. You can request to become a member and then I will accept you. If you continue to use this site we will assume that you are happy with it. I’d advice you to ask this question in our Facebook group. The government didn’t see any other way than to introduce a mortgage cap, to cool the strongly growing market. Budget and property type? With its progressive governance, conducive trade environment and massive global appeal, it has grown to become a favorite with buyers and investors alike. Dubai is the Middle East’s equivalent to Hong Kong and relies less on oil production compared to neighboring countries. Looking at the first quarter of 2020, prices decreased by -3.5% compared to a year earlier. View photos, videos, virtual-tours & read project reviews. Read our Dubai real estate market overview for Q1 2019 to find out more. UAE’s economy and its real estate markets have suffered from a drop in oil prices, particularly in 2020 when prices turned negative. In the past years, property developers have focused on building high-end and luxury residential projects. In the past years, the Emirati dirham (AED) gained against major regional currencies and some international currencies, making it more expensive to buy real estate for investors from India, China, Pakistan, and the UK, for example. The market still faces other challenges that continue to exert downward pressure. Prices are now down 30% over the past five years and where the chronic oversupply is much to blame for. Your email address will not be published. As mentioned, Dubai has suffered from an oversupply for years and the property market was put under pressure in 2020 due to the COVID-19 pandemic. 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