Lewis Allsopp, Chief Executive Officer of Allsopp & Allsopp said “As the COVID-19 pandemic hit and forced the UAE into lockdown, real estate industries worldwide suffered. The month of April saw our viewing numbers go from the thousands per month to being non-existent with restrictions of movement in the emirate which in turn impacted the number of transactions. However, we were quick to pivot by offering a new way to view properties with virtual viewings and video conference calls which our clients were extremely receptive to.
No one could predict what the outcome of this lull in the market would be, but as soon as the lockdown was lifted by the UAE Government, clients registering their interest in properties came flooding in and the market started moving quickly.”
May 2020 tenant registrations were down by only 3% and buyer registrations increased by 21% compared to May 2019. This followed on from a 50% decrease in tenant registrations and a 40% decrease in buyer registrations in April 2020 compared to April 2019.
Lewis Allsopp explains “April figures reflect the situation the Dubai property market was in with regards to viewings and the lack of mobility in the market with buyers and tenants unable to move to new homes. In May, buyer registration had risen by 31% since April and 21% since May 2019 which shows buyer sentiment despite the pandemic. We saw a rise in mortgage agreements in May 2020 by 47% compared to May 2019. This is a remarkable figure confirming our clients are taking a longer-term view of Dubai, whilst taking advantage of incredible value in certain communities throughout the city.”
June 2020 saw a rise in both tenant and buyer registrations; tenants by 25% and buyers by 136% compared to June 2019. Tenant registration rose by 25% since May 2020 with the number of transactions rising by 14%. Buyer registration rose by 43% with transactions rising 67% since May 2020 and transactions rising 61% since June 2019. Mortgage transactions in June 2020 rose by 118% when compared to June 2019.
Lewis Allsopp went on to say “The figures from June are outstanding with buyers entering the market in abundance. Those who were previously on the fence about buying a property had time during lockdown to talk it through with their families and make the decision to buy and some were prompted by the higher LTV of 80% and mortgage incentives, meaning properties were more affordable and the overall down payment including fees reduced from 33% of the value of the property down to 22%. The mortgage rates themselves are as low as ever, so many buyers are looking to take this opportunity to lock in these rates. Buyers were also enticed by the quality of properties coming to the market. We saw well looked after properties with upgrades get a lot of interest if they were priced correctly.”
“We didn’t see a huge increase in rental transactions from May to June of 2020. I put this down to tenants and landlords communicating and negotiating rental contracts. Some tenants have had a halt in rent payments for a couple of months and some have had rental reductions in order to stay in the property they are in to avoid moving at the moment. There is a bit more of a ‘wait and see’ on this side of the market. One thing we haven’t seen is a sharp increase in new property listings, which indicates that there isn’t a mass exodus of people from Dubai.”
Lewis Allsopp continues “Despite Dubai’s lockdown of 3 weeks in April and the near halt to the Dubai property market it is great to see that we have had increases in departments in Q2 2020 compared to Q2 2019.
Property management transactions have risen by 32% as more landlords are seeing the value in having their property managed by experts as the pandemic and lockdown of the city has brought rental negotiations to the forefront and with landlords either overseas to begin with or that have moved overseas recently, the value of having their property managed has been shown greatly. Property managers can really take the stresses of renting out a property and can carry out negotiations with years of experience behind them and sound knowledge of the Dubai rental market.”
The number of rental payments being made in 1 cheque has decreased by 14% in Q2 2020 compared to Q2 2019 and payments being made in 2 cheques also decreased by 20% in the same time frame. Payments being made in 3 or more cheques has risen by 24% in Q2 2020 compared to Q2 2019.
Allsopp explains “Rental payments being made in 1 or 2 cheques has been decreasing over the last few years and has done even more so this quarter due to landlords and tenants being in better communication as unforeseen circumstances brought on by the pandemic has affected both parties. Landlords are more accepting of payments being made in more cheques so long as they are able to get their property rented out at a fair price or to retain a tenant who already resides in their property.”
Allsopp & Allsopp report that the most popular area for Residential Lettings in Q2 of 2020 was Jumeirah Golf Estates and the most popular area for Residential Sales in Q2 2020 was Palm Jumeirah.
Allsopp says “It is no surprise that Jumeirah Golf Estates has come out as the top rental area for the quarter as many tenants value their outdoor space after lockdown. Many families have moved to the area to enjoy the facilities, the beautiful landscaping and the gardens which often have pools. The new Al Andalus apartments and townhouses have also proven popular with tenants. They are brand new, fresh and spacious which is appealing to tenants in Dubai.
Palm Jumeirah is a staple community in Dubai and a place many expats strive to live when they land in the emirate. Buyers are now finding it more affordable to buy in such a luxury community and we are seeing many people flock to the Palm to purchase their new home. The facilities are incredible with a running track, cafes and restaurants and many world-class 5 star hotels.”
*Data and statistics quoted are strictly Allsopp & Allsopp transactions from the period of 1st April to 30th June 2020 and are not reflective of the Dubai property market as a whole.