Complex Made Simple

Real estate investments, property values, presales, all up in Dubai

Is Dubai's real estate market experiencing a surge? Many indicators point in that direction

The emirate’s real estate sector showed a continuous flow of investments in May 2021 The capital values of Dubai residential homes commenced a growth trend Property presales surged in the UAE to $2.86 bn over the first five months of 2021

Investments continue to pour into Dubai’s real estate sector, according to the Dubai Land Department (DLD).

The emirate’s real estate sector showed a continuous flow of investments in May 2021, recording 5,359 investments worth over $3 billion, DLD said in a statement.

In addition, 11,387 new investors entered the market, comprising 66% of total registered investors since the beginning of the year.

As far as real estate transactions are concerned, 6,021 deals worth $5.94 bn were recorded in May 2021, achieving a significant growth of 197% in volume and 221% in value compared to May 2020.

Property sales constituted the biggest chunk of transactions (74%) during May 2021.

The top five areas preferred by investors for villas were Hadaeq Sheikh Mohammed Bin Rashid, followed by Wadi Al Safa 5, Wadi Al Safa 7, Al Thanyah Fourth, and Palm Jumeirah.

In apartment sales, Dubai Marina, Burj Khalifa, Palm Jumeirah, Business Bay, and Al Thanyah Fifth topped the list in May 2021.

Read: Phoenix Homes rises up to set new real estate benchmark in Dubai

Exclusive: GCC’s first real estate tokenization model to create more liquidity and trading ability

Residential homes’ capital values

On a citywide level, the capital values of Dubai residential homes commenced a growth trend, albeit a gradual one. All villa locations saw their capital values improved, and most apartment locations stabilized. 

7 out of 10 villa locations monitored by the Valustrat Price Index (VPI) saw annual improvements averaging between 1.1% to 5.4%. 

While May sales transactions were lower than April, the second quarter has already surpassed the same quarter last year. Residential sales volumes fell 13% over April. Monthly sales of off-plan and ready homes declined 10.7% and 14.8% respectively. Freehold locations monitored by the VPI saw capital values expand monthly by 1.1% on average, villas grew 2.2% and apartments marginally improved 0.3%. 

Growth in apartment capital values was observed in Palm Jumeirah, Business Bay, and Motor City with an average monthly increase of 1.3%. Most villa locations registered monthly increases of more than 2%, examples of which were Arabian Ranches at 2.8%, Jumeirah Park and The Lakes at 2.4%, Jumeirah Village and Jumeirah Park at 2.5%. 

Some 44% of home transactions were off-plan. Properties developed by Emaar, Seven Tides International, Binghatti Holding, Nakheel, DAMAC, Select Group, and Dubai Properties, topped the sales charts overall. 

Top off-plan locations transacted during May were in Jumeirah Village, Jumeirah Lake Towers, Dubai Harbour, Downtown Dubai, Arjan, Al Jadaf, and Dubai Hills Estate. Most transacted ready homes were located in Dubai Marina, Jumeirah Village, Palm Jumeirah, Business Bay, Jumeirah Lake Towers, and Jumeirah Beach Residence.

S&P Global on Emaar Properties

S&P Global Ratings have said today in a report titled, “Dubai-Based Real Estate Developer Emaar Properties Outlook Revised to Stable from Negative on Stronger Demand” that the Dubai residential real estate market is gaining momentum as stronger demand drives prices up in some areas of the emirate for the first time since 2015.

Emaar Properties has the lion’s share of the growth thanks to its leading market position, as indicated by the surge in property presales in the UAE to $2.86 bn over the first five months of 2021, compared to $1.7 bn reported for all of 2020.

 S&P Global Ratings expect a rebound in the company’s earnings and credit metrics in 2021, with EBITDA likely to exceed $2.18 bn and funds from operations (FFO) to debt to improve to about 30%. S&P, therefore, revised their outlook on Emaar Properties to stable from negative and affirmed their ‘BB+’ long-term issuer credit rating on the company.