There are nine main supporting factors that have contributed to the growth of the value of real estate transactions in Dubai during the first quarter of 2021, increasing 44 per cent on an annual basis, according to the chairman of brokerage W Capital.
According to Walid Al Zarouni, these include a strong Covid-19 vaccination drive, new visa residency laws, and the upcoming Expo 2020 Dubai event.
Al Zarouni revealed that the Dubai Land Department’s data showed a growth in real estate transactions value to Dh68.6 billion in the months January to March of this year, as there were 18.526 transactions. The value of real estate transactions was Dh47.7 billion, compared 14,684 transactions in the same period of 2020. The data showed that sales recorded an annual growth of 16 per cent reaching Dh24.8 billion, through 11,658 deals, while the value of mortgages during the same period amounted to about Dh39.5 billion, with an annual growth of 76 per cent with 8,091 deals.
In addition, real estate donations reached Dh4.8 billion, with 828 deals during the first quarter of this year. Al-Zarouni pointed out that ready real estate share of sales was the largest at 80 per cent, equivalent to Dh19.8 billion, compared to 20 per cent of off-plan sales at a total value of Dh4.9 billion. Sheikh Mohammed bin Rashid Gardens ranked the best of the five areas in terms of sales value for apartments and villas during the first quarter of 2021, followed by Wadi Al-Safa 5, Wadi Al-Safa 7, Nad Al Sheba 1, and Al Thanayah Fourth. With regard to the apartment category, the lead came as follows: Dubai Marina, Palm Jumeirah, Business Bay, Burj Khalifa, and Merkad, respectively.
Walid Al-Zarouni noted that the sales recovery reflects optimism during 2021, as the investment incentives provided by the emirate authorities and government initiatives in support of population growth, boosted the direct demand for real estate. Al-Zarouni also highlighted the ‘Dubai Urban Plan 2040’, which is aimed at making the Dubai the best place in the world for living and working. The plan focuses on achieving a global development model supporting the well-being of society, empowering people and motivating them.
Al-Zarouni indicated that the widespread Covid-19 vaccination centers in the UAE are a key driver of Dubai’s real estate sector’s recover in the first quarter of this year. He also said that the amendment of some provisions related to the executive regulations of the Federal Law regarding nationality and passports, through which the granting of Emirati nationality to investors, professionals, talents and their families, based on a number of terms and conditions, is a qualitative shift for the real estate sector, as it creates a new demand for the sector that decrease supply and paves the way for launching new projects.
In addition, he says that there is no doubt that hosting the Dubai Expo 2020 and spending to develop infrastructure projects will enhance the demand for rent in the emirate, as well as boost investment in the real estate sector in the coming years. Research studies estimated the added value in the post-Expo period to be at Dh62.2 billion until December 2031.
Al-Zarouni said that the real estate sector will also benefit from the approval of granting golden residency to residents for a period of 10 years for several categories, most notably those with doctoral degrees, all doctors, and engineers in the fields of computer engineering, electronics, programming, electricity and biotechnology. “Such decisions enhance the purchasing power of real estate as the targeted groups seek settlement in the country, raise the value of foreign investments inflows, and help create new jobs.”
Al-Zarouni said that the emirate of Dubai provides qualitative facilities to attract local, Arab and foreign investors, as it has decided to reform the Commercial Companies Law and cancel the requirement that some local companies have an Emirati shareholder and allow foreigners 100 per cent ownership in 122 commercial activities. This is expected to boost foreign direct investment in the UAE in general and the real estate sector in particular.
Al-Zarouni also said that the risks of the pandemic diverted attention towards obtaining independent and larger living spaces, whereas the remote work policies reinforced the tendency to acquire larger homes suitable for living and working together. He expects those policies to continue after the pandemic. He also said that the decrease in the number of new projects helps to reduce the real estate supply amid the growth in demand, which supports the growth of prices to satisfactory levels, and increases the attractiveness of domestic and foreign investment.
Also, UAE banks have introduced a reduction in interest rates on mortgage loans, which encourages people to buy residential units instead of renting, at a time when prices have reached levels that make investing in real estate in Dubai a good opportunity. Lastly, Dubai's reserved its position as the best financial and business destination in the Gulf region. This is helping to increase the demand for offices and boost the turnout, thanks to the speed of vaccination campaigns.