It won’t be wrong to state that villas have been the driving force of the Dubai property market post a brief setback caused by COVID-19. Apartments, too, have raked in high numbers, but there has been a noted improvement in the sales volume and transaction value of villas in Dubai.
Villa market in Dubai showed double-digit growth in August 2021. With 5,780 sales valuing Dh14.97 billion, it has now become the 2nd highest month vis-à-vis the volume of sales transactions after December 2013. Earlier, the second spot for highest sales transaction in one calendar month was occupied by January 2017.
With these figures, the total number of transactions in 2021 so far has amounted to 37,537 worth AED88.12 billion. Statistics show that the total volume and value of transactions in 2021 have already surpassed the figures achieved by the Dubai property market in 2020 that remained at 35,401 transactions valuing AED71.87 billion.
As per ValuStrat’s VPI, 13 villa locations in Dubai have either remained stabilised or increased as compared to the preceding month. This clearly depicts an upward trend of the real estate sector in Dubai, paving way for its strong recovery.
Let’s analyse the key factors that led to the high performance of the villa market in Dubai:
The second quarter saw the return of investors in the Dubai property market. The promising results produced in Q1, 2021 resulted in a higher number of investors entering the market. This led to increased sales volume and property prices, particularly in the residential sector. The controlled COVID-19 situation in Dubai also played a part here.
With the trend in favour of villas, investors capitalized on this opportunity, which has resulted in a higher number of transactions for these standalone housing units.
As the first wave of COVID-19 hit Dubai in early 2020 and people were confined to their homes, many realised the importance of having outdoor spaces and bigger residences. This led to a surge in demand for villas and townhouses. As per statistics, there was a 58% increase in searches for villas and townhouses in July 2020 in comparison to the same month in 2019.
The trend continues to prevail as Emiratis now prefer living in bigger and spacious residences surrounded by outdoor space.
The hugely anticipated global event Expo 2020 Dubai is just a few days away now. The exhibition, which is set to welcome a huge number of visitors from over 190 countries, is going to last for six months, starting from 1st October 2021. It is expected that areas close to the Expo 2020 site will witness an increased demand for residences. Hotels and resorts, too, are expected to remain busy during this tenure.
With people flying to Dubai in high numbers, many people will look for apartments and villas for rent in Dubai, along with other short-term rental options. Investors and end-users are expecting an increase in rental income when the exhibition commences.
Even since the demand for villas in Dubai has witnessed a surge, ROI has improved as well. Competitive rates (particularly, in the competitive market) are other major factors that are helping investors to earn a high ROI from villas.
With more tenants showing interest in villas, as seen by the rising enquiries for villas for rent in Dubai, these properties are producing a higher rental yield, attracting more investors and end-users.
Many villa communities in Dubai have shown exceptional growth in terms of capital gains. Arabian Ranches remained at the forefront with 22% capital gains, followed by Jumeirah Island (20.8%). Dubai Hills Estate and The Lakes also showed growth of 18.5% and 18.3%, respectively.
The performance of key areas of apartments was mixed-bag, with some producing single-digit annual growth, as compared to double-digital growth produced by villas. However, with Expo 2020 Dubai arriving, the demand for apartments is expected to witness a rise as well. Shedding light on key apartment areas, Palm Jumeirah, Jumeirah Beach Residence and Al Furjan recorded a growth of 6.8%, 6.1% and 4.6%, respectively.
Keeping in view the statistics and upward trend of the market, it’s safe to say that the Dubai property market is on the road to a strong recovery. This, coupled with ex-pat and investor-friendly policies, such as renewable golden visa, amended business rules, etc., make it the best time to buy a property in Dubai. You can check out the listings for the most sought-after properties in key areas of Dubai on the Zoom Property portal. For an even better experience, download our Zoom Property mobile app, available for both iOS and Android smartphones.