The entire world is trying to come to terms with the unprecedented challenges of the COVID-19 outbreak, and the UAE is no different. While social distancing has created challenges for business continuity in the last two weeks, the real estate sector was largely unaffected in the first quarter of 2020, since the Dubai government began introducing restrictive measures to safeguard public safety from the second week of March. In fact, based on the latest data released by the UAE's leading property website, Bayut, the Dubai real estate market has been showing promising signs of stability in the first three months of 2020 with property prices across popular areas in the emirate holding steady or even slightly increasing in Q1 2020, compared to the prices in Q4 2019. While the ongoing pandemic is likely to impact the market in the coming months, the overall trend in the first three months of 2020 is in line with the patterns observed throughout last year. Well-integrated affordable communities have remained a firm favorite with tenants, while upscale neighborhoods with family-friendly amenities have gained popularity with buyers and investors. The leading property classifieds website has also reported that key neighborhoods such as Dubai Marina, Palm Jumeirah and Downtown Dubai have held strong, with continued competitive prices attracting prospective buyers in Dubai. While prices have remained competitive, transaction volumes have also gone up in the emirate as per DLD, which recorded a total of 10,272 real estate transactions in the first quarter of 2020 amounting to a value of AED 20.86B. This is a substantial increase compared to the 8,021 transactions carried out in the last quarter of 2019, worth AED15.94B. Properties for Sale in Dubai In terms of popularity, demand has increased for neighborhoods close to the Expo site with buyers and investors interested in purchasing ready villas in Dubai as per data released by Bayut. Dubailand's fast developing community, The Villa has secured the top spot with potential buyers interested in purchasing villas in Dubai, beating the usual favorites of Arabian Ranches and Palm Jumeirah to the second and third position respectively. The price per square foot in The Villa has remained relatively unchanged, declining by an almost negligible 0.7% in Q1 2020, to average at AED669. The average price per square foot in Arabian Ranches has seen a minor increase of 2.5% in Q1 of 2020, averaging at AED903, up from AED881 in Q4 of 2019. Villas for sale in the waterfront community of Palm Jumeirah have shown healthy signs of recovery with price per square foot increasing by 5.3% from AED2,095 in Q4 2019 to AED2,206 in Q1 2020. This could be attributed to natural market corrections that have been happening over the course of the last year after several off plan projects including the sophisticated XXII Carat Villas were handed over in the area Other popular areas to buy villas in Dubai include established communities such as The Springs and Emirates Hills and newer developments such as Dubai Hills Estate. For those interested in purchasing apartments, the luxurious and ever-popular neighborhood of Dubai Marina has continued to remain the most sought after option. The price per square foot in Dubai Marina has also remained stable in the first quarter of 2020 at AED1,260. When it comes to the apartments for sale in Downtown Dubai, Jumeirah Lake Towers (JLT) and Palm Jumeirah the price per square foot has also remained unchanged in Q1 of 2020, pointing to further recovery in the market. Property prices in other in-demand areas such as Business Bay, JVC and International City, have remained fairly stable with marginal declines in price per square foot of under 5%. For investors keen on buying properties offering high return-on-investment based on projected rental yields in Dubai, International City has remained one of the best options, offering a 9% ROI for apartments. When it comes to villas for sale in Dubai, Jumeirah Village Circle (JVC) has the best rental returns at an average of 6.5%. As per DLD's latest reports, 49.3% of the total sales transactions until March 15, 2020, have been from the off-plan property market in Dubai. Those interested in investing in off-plan projects with attractive payment plans are keen on well-integrated, family-oriented communities such as Akoya Oxygen and Jumeirah Village Circle (JVC). Within Akoya Oxygen, the Albizia development which offers plots, luxury villas and townhouses, has attracted the most attention from potential buyers while the luxury off-plan apartments in Pantheon Elysee are the most searched for by prospective homeowners in JVC as per Bayut's report. Rental Properties in Dubai Mirdif has retained its position as the most desired neighborhood for renting villas as per Bayut, with prices across the board remaining largely unchanged. Average rents for 3-bedroom villas in Mirdif have experienced a minor drop of 5.8% from AED103k in Q4 2019 to AED97k now, while the rents for 4 and 5-bed villas have continued to average at AED 119k and AED 125k, respectively. This stability has also been observed for other established neighborhoods such as Jumeirah, The Springs, and Arabian Ranches. The other areas that have made it to the list of top 10 areas for renting villas in Dubai are Al Barsha, Akoya Oxygen, Dubai Hills Estate and Reem where rents remain competitive, experiencing minor declines between 2-7%. When it comes to rental apartments in Dubai, Jumeirah Village Circle (JVC) has been the favored choice for tenants. Rents in JVC have reduced marginally between 2-4% with studios averaging at a competitively priced AED34k, 1-bedroom units at AED48k and 2 BHK units going for AED70k. Established communities such as Bur Dubai, Al Nahda, Dubai Marina, Deira, Dubai Silicon Oasis, Dubailand, Business Bay, International City and Downtown Dubai have also continued to attract tenants looking to rent apartments in Dubai. The rental trend for apartments in these areas shows signs of bottoming out, echoing the overall trend in the market. Commenting on the trends, Bayut's CEO Haider Ali Khan said: "Before this unfortunate global event impacted all of our lives, property prices across the emirate were showing encouraging signs of stabilizing, based on Bayut's data from the first quarter. "We also noticed a surge in interest for residential property listings in Dubai with close to 15 million searches conducted in the first quarter. Similarly, there were also uplifting signs from a transactional perspective, with the DLD reporting well over 10,000 sales transactions from January to March 2020." "Although the first quarter shows some healthy numbers, we should be prepared to see some fluctuations in the coming months as the UAE continues to lead the region's fight against COVID-19. While the government has been proactive by announcing stimulus packages to support the industry, we still need to wait and observe the impact on consumer interest in the following quarter." "It is also vital that we all stay positive, support the government and come together as a community to successfully tide over this challenging time. At Bayut, we are working very closely with our partners in the industry, staying transparent with our communications and identifying opportunities to help the real estate fraternity come out of this difficult time stronger than before. "As a part of this effort, we have launched our highly engaging and well attended weekly webinars, The State of Real Estate with Bayut, with leading experts from the real estate industry sharing their insights on productive ways to deal with the current situation. "We have also expedited certain virtual solutions to help prospective buyers and tenants who are impacted by the social distancing guidelines, by launching the region's first 3D Live visualizations of our exclusive floor plans. We have also started hosting guided property tours for our consumers on our website and app." "I think there is a real opportunity for all of us to learn, innovate and build strong relationships with our users and partners during this period. It is up to us to look for the silver lining, make the most of these opportunities and come out stronger together." — SG
