November 2020 peaks with the most number of Real Estate Transactions in nine months
In November 2020, 3,928 transactions worth AED 7.65 billion took place in the Dubai Real Estate market. This was 15.6 percent more than October in terms of volume and almost 10 per cent more in terms of value. 38.5 percent of these transactions were from the off-plan market and 61.5 percent of these transactions were in the secondary market.
The market declined during the time of the lockdown and at the peak of the pandemic in Dubai, but because of measures taken and protocols set by the Dubai Government we are back to a pre-covid residential real estate market. To date, we have been going toward a V shaped recovery and when we look at the numbers, from the lowest numbers we had in May (1,452 transactions) the market has recovered by almost 2.7 times.
“The trends we have seen this year have been interesting to say the least, no one expected for the market to rebound so quickly and for some real estate companies to have record breaking months.” says Lynnette Abad, Director of Research & Data at Property Finder. “It will be interesting to see what will happen in H1 of 2021 as the continued spike in transactions levels will most likely not be sustainable.”
The top areas for overall sales in November 2020 were Dubai Marina (14.5 percent), Business Bay (10.6 percent), Jumeirah Village Circle (7.4 percent), Downtown Dubai (6.3 percent) and Palm Jumeirah (4.9 percent). 22.4 percent of the transactions were for 1-bedroom units, 21.9 percent for 2-bedroom units and 20.4 percent for 3-bedroom units.
Looking at proprietary data from Property Finder, the search trends show us that the top five locations for consumers searching for residential units in Dubai were Dubai Marina, Palm Jumeirah, Downtown Dubai, Dubai Hills Estate and Arabian Ranches. Keywords such as ‘furnished’, ‘upgraded’ and ‘sea-view’ were the top three keywords in the month of November 2020.
As confidence restores in the market, we can see this with high end apartments being bought in the off-plan market. One of the projects that should be highlighted is El Primo where 4 apartments were sold, each for more than AED 18.9 million. The most expensive apartment was a 5- bedroom apartment with a built-up area of almost 11,500 sq ft that was sold for more AED 44 million. The top ten most expensive apartments sold in November have an aggregated value of almost AED 185 million.
However, if we look at the off-plan market compared to the secondary market it has been stagnant as the percentage of total transactions has fallen from being 50 percent of total monthly transactions at the beginning of the year to almost 25 percent in November 2020. The recent statement by Emaar Properties founder Mohammed Alabbar stating “We don’t build anymore” makes complete sense. The market is oversupplied with projects that will be delivered over the next few years and this has and will continue to put a strain on the existing supply.
Compared to last year the off-plan transaction volume has fallen by more than 19 percent and the total off-plan transactions value has fallen by over 23 percent year-on-year. The secondary/ready market transactions, however, have only fallen in volume by 9 percent and the total value by less than 6.5 percent. According to Abad “During the pandemic, the trends are clear that people are looking for ready properties to move into now and the demand for off-plan has decreased.”