Dubai's prime residential property market is witnessing strong transaction volumes, especially the secondary market which doubled quarter-on-quarter.
According to an analysis by Luxhabitat Sotheby's based on data from the Dubai Land Department, more than 2,297 apartments and 438 villas were transacted in Q3 2020, an increase of 24 per cent in overall number of units sold quarter-on-quarter.
Total volume of transactions in the prime residential market stood at Dh7.4 billion compared to Dh5 billion in Q2 2020, an increase of 49 per cent.
However, prices of prime residential market fell 10 per cent from Dh1,327 to Dh1,194 per square feet.
The top 3 areas in terms of sales volume were MBR City (Dh2.2 billion), Downtown Dubai (Dh1.2 billion) and Palm Jumeirah (Dh1 billion).
"We have seen the demand rise for townhouses and villas as they are more appealing to end-users, especially those properties with good outdoor spaces and swimming pools. Palm Jumeirah, MBR City District 1, Arabian Ranches, Al Barari and Dubai Hills Estate amongst others have witnessed a significant spike in interest from end-users," said Andrew Cleator, managing director of Luxhabitat Sotheby's International Realty.
"Add this to the fact that banks are currently offering low fixed-rate mortgages as well as higher loan to value rates. This has triggered a flurry of first-time buyer purchases as buyers now see the long-term benefits of owning as opposed to renting," said Cleator.
Data showed that Dubai's secondary prime residential market has doubled in sales volume quarter-on-quarter as the volume of transactions reached Dh6 billion in Q3 compared to Dh2.7 billion in the previous quarter. There also has been a price correction of 12 per cent, from Dh1,169 per sqft in Q2 to Dh1,028 in Q3.
The number of apartments sold in the secondary market doubled quarter-on-quarter from 520 to 1,177 and the number of villas sold nearly doubled from 188 to 418. The average price of an apartment in the secondary prime residential market is now Dh1.8 million and a villa is Dh6 million.
"As the off-plan segment hasn't been able to absorb the capital with enough new releases, cash is diverted to the most stable secondary property markets and we have seen a big increase in the prime residential markets. This will only strengthen further as Dubai will play a key role in the post-pandemic scenario," said George Azar, CEO of Luxhabitat Sotheby's International Realty.
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