Dubai's real estate market retained its appeal despite a slowdown in economic activity in the wake of the coronavirus outbreak across the globe, as it recorded transactions worth Dh72.5 billion in the first half of 2020, according to a report issued by the Dubai Land Department (DLD).
The latest official data indicates that Dubai's real estate sector is gradually returning to normal, driven by stimulus packages and initiatives launched by the government and its departments in the past few months.
The report shows that the value of transactions for the second quarter of 2020 exceeded Dh24.5 billion with 7,834 deals; while the total number of deals during the January-June period reached at 22,779, representing a total value of Dh72.5 billion.
Haider Tuaima, head of real estate research at ValuStrat, said in the eight months prior to the Covid-19 pandemic, sales transaction activity in Dubai was on a significant growth trend.
"The first quarter of 2020 saw cash sales of ready homes up 30.4 per cent annually," he said.
"Despite the Covid-19 challenges that began its impact during the second half of March, in fact, the first quarter of 2020 was the best first quarter for ready home cash sales since 2014."
Even with a weaker second quarter, he said it came as no surprise that the first half was relatively a busy one despite the challenges involved.
"Going forward, assuming the property market remains open as at present and no further lockdown periods are re-introduced and judging from current trends, we expect improved transactional activity at a time when properties become more affordable," Tuaima said.
In a separate report issued by the Dubai Statistics Centre, the real estate sector registered a growth of 3.7 per cent in the first quarter compared to the same period last year, contributing eight per cent to the overall economy and pushing it higher by 0.27 percentage points.
The sector plays an important role in speeding up recovery in the broader businesses sector. Last year, real estate activities achieved a growth of 3.3 per cent and contributed 7.2 per cent of Dubai's GDP, with an added value of Dh29.4 billion, compared to Dh28.5 billion in 2018. This represented a 10.7 per cent contribution to Dubai's overall economic growth.
"The latest Dubai real estate transaction volumes clearly reflect the market bounce-back due to the normal business activities, steadily increasing tourist arrivals, strict safety directives issued by UAE authorities amid the Covid-19 outbreak, and rebuilding the momentum for Expo 2020," said Imran Farooq, CEO of Samana Developers.
"I believe the way Dubai is heading to normalcy will bring the real estate sector back on its growth track, backed by Dubai's strong regulations and quick decision-making," he said.
In terms of investments, the report shows that 9,160 investors concluded 11,940 investments worth Dh21.2 billion in the first quarter, while investments in the second quarter saw a decline with 5,528 investors having 6,523 investments worth almost Dh11 billion. A total of 14,688 investors finalised 18,463 investments in the January-June 2020 period worth Dh32.15 billion.
During the April-June quarter, Dubai's real estate market welcomed 1,223 investors from the GCC with 1,431 investments worth over Dh2.1 billion, while 706 Arab investors concluded 798 investments worth approximately Dh1.2 billion. The report highlights the continued attractiveness of Dubai's real estate market for foreign investors in the second quarter, evidenced by the fact that 3,444 investors concluded 3,889 investments valued at Dh5.8 billion.
During January-June, 2,895 GCC investors concluded 3,712 investments worth Dh6 billion, while 1,839 investors from the Arab region finalised 2,203 investments worth over Dh3.2 billion. There was a marked increase in the number of foreign investors in first half of 2020 from the same period last year, with 9,213 investors concluding 11,240 investment deals worth over Dh16.2 billion.
Women accounted for a substantial share of the number and value of investments. In the April-June quarter, as many as 1,781 female investors finalized 1,922 investment deals worth Dh2.6 billion. In January-June, 4,536 female investors concluded 5,112 investments worth Dh6.6 billion.
Mortgage and sales deals
In terms of mortgage registration of lands, buildings, and units in April-June 2020 quarter, Hadaeq Sheikh Mohammed bin Rashid was first with 205 transactions worth Dh341 million, followed by Me'aisem First with 113 transactions worth Dh113 million, and Jebel Ali First with 107 transactions worth Dh156 million.
Rounding off the top 10 were Burj Khalifa, Al Yelayiss 2, Dubai Marina, Al Thanyah Fourth, Al Barsha South Fourth, Wadi Al Safa 7 and Al Thanyah Fifth.
Areas with highest activity
During January-June 2020, Hadaeq Sheikh Mohammed bin Rashid topped the areas with the highest mortgage registration transactions with 558 transactions worth Dh996 million, followed by Dubai Marina with 293 transactions worth Dh817 million and Jebel Ali First with 272 transactions worth Dh1.26 billion.
In terms of sales, Dubai Marina topped the list with 1,532 transactions worth Dh3.375 billion, followed by Business Bay with 1,244 transactions worth Dh1.653 billion, and Al Merkadh with 1,192 transactions worth Dh2.522 billion.