Due to the affordable property prices ,low interest rates where the average mortgage interest rate stands at 3.7% As opposed to 5.2% last year and the a greater LTV ratio meaning that those purchasing a home for the first time are able to benefit from an extra 5% financing , the market witnessed a quick recovery , an increase of 68% was registered in terms of the value of property transfers completed within the 3rd quarter as opposed to the 2nd, In addition to this, 1.2% increase in comparison to the 3rd quarter of last year (prior to the global pandemic).
Furthermore, the overall value per transaction rose to 2.1 AED million this quarter as opposed to 1.82 AED million in the same quarter of 2019.
The substantial demand from first time property buyers resulted in 119% jump in the value of secondary market transfers comparing with the previous quarter and 23% improvement from numbers of the same quarter last year.
Given that the performance of the secondary market is linked to finance buyers, we were required to analyze the volume of mortgage transactions recorded in the Dubai Land Department, analysis show that the number of mortgage deals soared by 100% as opposed to the previous quarter and by 8% year on year. In comparison with the last quarter, the value of Primary market (Off plan) deals remained constant, nevertheless there is a 36% reduction in comparison to the same quarter of 2019, this is down to fewer projects being launched by property developers.
Out of the total number of properties which were purchased in the city within this particular quarter, 37% were off plan properties and 63% were ready properties.
The highest demand for off plan property was recorded at Tilal Al Ghaf, the freshly launched community by Majid al Futtaim.
It’s worth mentioning that Tilal Al Ghaf out performed Dubai Marina the highest performing secondary market community in terms of the value of transactions recorded within the quarter.
In regards to the number of properties purchased. In total 428 properties were purchased, this sums up to 631 AED million in Tilal Al Ghaf in comparison to the 441 transactions at the Dubai Marina which equates to 623 AED million.
During this quarter there was also a substantial number of homes which were purchased for more than 10AED million, thus alluding to the great demand for luxury properties , particularly in newly developed communities.
Palm Jumeirah, Dubai Hills Estate as well as District one at Mohammed Bin Rashid Al Maktoum City are amongst the best performing communities for luxury property.
Within the 3rd quarter, a 16,885 SQ.FT penthouse in Il primo in Downtown was purchased for a whopping 58.6 AED million, this was the most expensive property sold.
In regards to supply, it is believed that future planned supply could continue to add pressure on prices of apartments in non-prime communities over the short term.
It is also believed that the newly established real estate planning committee will be able to manage and balance the supply and demand within the city.