It was terrifying 3 months starting from March 2020 followed by another 3 months. It was a terror people had for the last decade: global pandemic, lockdown, uncertainty, lost jobs, unpaid leaves, slashed salaries, business losses.
During the pandemic time, Dubai’s real estate has seen many attractive and distressed deals:
- Amazing Two Bedroom Apartment on Palm Jumeirah Island for only AED 1,100,000.
- Large Three-Bedroom Apartment in Jumeirah Beach Residence for only AED 1,000,000.
- Luxurious Two-Bedroom Apartment on Bluewaters Island for only AED 2,400,000.
- Attractive Lease-to-Own Payment Plans for up to 10 years from Developers.
The salvation appeared when the market started demonstrating the positive movement starting from the middle of September 2020. There are several reasons for that:
- People who used to rent a property in Dubai for some time decided it’s better to go with a property purchase since prices are low.
- Central Bank reduced the mortgage entrance and increased provided mortgage amount by +5%. From 75% to 80% for foreigners and from 80% to 85% for locals.
- Many banks waived pre-approval and other fees to increase the sales.
- Lots of tourists started coming to Dubai as many countries were closed for travel. Therefore, this category of people decided Dubai is a good place to stay, live, work and grow up kids.
Having increasing demand made landlords increasing prices and property developers taking off the offers. Some of the examples are below:
- The price for a Two-Bedroom Apartment in Jumeirah Beach Residence had increased in the last 3 months from AED 1,200,000 to AED 1,350,000.
- Price for Three Bedroom Apartment on Bluewaters Island had increased in the last 3 months from AED 5,200,000 to AED 5,500,000.
- The price for a Two-Bedroom Apartment in Dubai Marina had increased in the last 3 months from AED 1,100,000 to AED 1,200,000.
- The Developer of the Jumeirah Gate Project located in Jumeirah Beach Residence and popular with the name “Address JBR The Beach”, have increased selling prices and removed the offer of 2 years service charge waiver
I expect two scenarios to develop:
- Market prices will keep increasing for up to 20-25% till the time the next two categories will be purchasing properties:
- End-users who were renting a property all this time.
- New investors and buyers coming to Dubai.
- The market will be additionally stimulated by the upcoming Expo2020 and new supporting Laws.
- A lot of people visited Dubai for the first time due to pandemics while the rest of the world was unreachable it creates additional buzz for Dubai and creates interest for the future living.
- Market prices will increase only slightly, because, Dubai’s buzz will reduce along with the interest of people to Dubai, as most of the tourists went back home after celebrating the New Year in Dubai.
- Dubai is listed as Level 4 by the US Government stating it’s not safe to travel due to COVID-19. This will make fewer people travel to Dubai, reducing the number of visitors for Expo2020.
- End-users will go out from the market as they already purchased a home.
- Offers of banks will end by reducing the number of mortgage buyers, which are almost always end-users.
Key Question: Is it the right time to buy a property in Dubai?
Answer: Price-wise, you’re late for a 3 months. But better late than never. If you’ve ever planned to own a property in Dubai and you’re liquid enough, it is a good time.
By Akhmed Idigov