Rebound in mid-market segment pegged to follow
Dubai's prime areas such as Downtown, Dubai Hills and The Palm are leading the recovery in the emirate's property market, rising up to 30 percent in some vicinities, with the middle segment pegged to follow, say property developers and analysts.
The recovery in villa and townhouse segments is going strong, showing a significant rebound that is anywhere between 15 percent to 30 percent, says Imran Farooq, CEO of Samana Developers “Downtown has also shown a recovery. Some of the projects have appreciated close to 30 percent. A similar trend can be seen in Dubai Marina and other prime areas of the emirate,” said Farooq.
“The mid-segment should follow because now there is a general awareness in the market that the market has started recovering after bottoming out, because of the cheap money and people feeling safer during the pandemic. These are some of the few reasons the local real estate market is recovering,” he added.
Taimur Khan, an associate partner at Knight Frank, said whilst Dubai’s prime residential market saw prices decrease by 4.2 percent in the year to December 2020, the market is beginning to see signs of a recovery in price performance in some prime sub-markets.
“For example, in the six months to December 2020, apartment and villa prices on Palm Jumeirah increased by 5.1 percent and 9.4 percent, respectively. Over the same period, villa prices in District One have increased by 3.5 percent. Other prime markets such as Downtown Dubai and Emirates Hills are also showing similar signs of improvement in market performance,” Khan added.
January data on the Property Monitor Dynamic Price Index recorded a monthly increase of 1.1 percent in January. “Evidence is starting to emerge of popular ‘hot spots’ with the price recovery not uniformly spread across all communities,” it added.
Importantly, real estate transactions had also started to recover from the third quarter of last year following the lifting of restrictions related to the Covid-19 pandemic. In addition, low-interest rates are also prompting end-users and investors to buy properties at a very high attractive level.
Speaking after the inauguration of Samana Greens project, Farooq noted that currently this recovery is without much rental correction in the apartment segment but villas have shown an upward trend in rental recovery.
“The apartment sector might follow. Once the apartment segment starts following the upward rental trend, the mid-segment will also start recovering,” Farooq said.
The Dh75 million Saman Greens residential project in Arjan was inaugurated by Marwan bin Ghalita, CEO of Dubai’s Real Estate Regulatory Authority, along with other top officials. It houses 122 units and comprises studios, and one- and two-bedroom apartments, along with six retail spaces at the ground level. The group plans to launch three new residential projects in Dubai in 2021.