Over the course of the past two quarters, the market witnessed a continued recovery from the COVID-19 pandemic slow down.

Over the course of the past two quarters, the market witnessed a continued recovery from the COVID-19 pandemic slow down. The performance of the real estate market has jumped by 20% compared to the previous quarter, yet it is still 8% below the respective numbers for Q4 of 2020 in terms of the value of total properties transferred.

Digging deeper into the numbers, the demand for ready properties (secondary market) has spiked during Q4 2020, transactions have increased by 21% in both volume and value, as compared to the same quarter of the last year. Furthermore, mortgage transactions have increased by 10% year-on-year.

On the other hand, the performance of the primary market has improved during Q4 by 17%, as compared to the previous quarter.

As compared to Q4 of 2019, the primary market performance has declined by 40% and 50% by volume and value respectively.

The sharp decline can be explained by the new measures taken by the Dubai’s Land Department in order to control the supply of new properties on the market, the government was able to drop the supply of new property by 89% in comparison with the number of units launched during 2019.

Dubai Marina was the top-performing community in Dubai during the quarter in terms of both ready and offplan property transactions: 1064 residential properties were sold in the community with a total value of 1.9 Billion AED. The highest demand for an off-plan property in Dubai Marina was registered in Emaar’s latest development Emaar Beach Front.

During the quarter, 118 luxury properties (above 10 Million AED) were sold, with a total value of 2.05 Billion AED. This translates to a 103% increase in terms of the number of transactions and a 124% increase in terms of the value of properties transferred during the quarter, as opposed to the same quarter last year. 62% of the luxury properties sold during the quarter were villa/mansion 
properties, while 38% were apartments and penthouses. The spike in demand for villa and townhouse properties can be explained by the life-style changes associated with the lockdown implemented in response to the pandemic. As people spend more time at home, they realize the value of having a backyard or a private swimming pool, as well as sufficient space for remote work or learning.

In terms of price change, multiple communities in Dubai have registered a slight increase in transactional prices. The Emirates living district (Springs, Lakes, Meadows, and Emirates Hills) has registered an increase of 6.8%, while City Walk and Dubai Marina have registered an increase of 6.5% and 5.1% respectively.

As per my Q3 2020 note, I expect the same trend to continue. Evidence suggests that the price for villa and townhouse communities has nearly bottomed out, and the market will reflect that in the coming quarters. In regards to apartment prices, I beleive that prime location communities will bottom out soon, while new emerging communities will continue to face the supply pressure.