Property trends: UAE investors, tenants prefer villas amid coronavirus

Tenants, buyers look to escape crowded communities and enjoy personal outdoor space

  
Image used for illustrative purpose. La Quinta, which is the second phase of the Villanova residential master community in Dubailand. Dubai Properties/Handout via Thomson Reuters Zawya

Image used for illustrative purpose. La Quinta, which is the second phase of the Villanova residential master community in Dubailand. Dubai Properties/Handout via Thomson Reuters Zawya

Dubai Properties Group

Demand for villas and townhouses, as well as hotel apartments, in Dubai and Abu Dhabi has gone up in the last few months, as a growing number of UAE residents look to escape crowded buildings and settle in spacious homes amid the coronavirus-induced era of social distancing.

Enquiries from potential buyers who are interested to spend 1 million or upwards of 5 million UAE dirhams have been on the rise since after the news about the virus broke, according Lynnette Abad, director of research and data at Property Finder. Tenants have also shown a spike in interest for similar residential units.

Areas such as Dubai South, Springs, Jumeirah Village Circle, Arabian Ranches, Dubailand, Town Square and Mira are proving particularly popular, as well as residential units with a private garden or swimming pool.

“We started seeing the demand grow [for these properties} almost immediately after the COVID-19 crisis began and the demand grew weekly at a significant pace, while apartment demand declined,” Abad told Zawya.

“We also started to see a rise in searches for keywords such as outdoor space, garden and pool. It is very clear, through the data, that personal, outside space became a commodity during the crisis and I strongly believe this trend will continue post-crisis,” she added.

The surge in demand is a shot in the arm for the UAE real estate market, which has recently seen a decline in the influx of foreign buyers due to the coronavirus lockdowns worldwide. The market had been on a downtrend prior to the break as a result of a huge supply glut.

According to a Property Finder report on Wednesday, the number of listing views by consumers on properties for sale on its website has increased by 27 percent and 47 percent for rental over the past four weeks. 

Consumer enquiries for Dubai villas, in particular, have gone up by 46 percent during the first week of May against the same week last year. 

In Abu Dhabi, enquiries for villas were twice as high during the same period compared to a year earlier. And, for those who can’t afford villas near the city centre, living as far away as possible seem like a good option, with enquiries for both apartments and villas in the northern emirates posting significant increases.

For hotel apartments, searches by consumers have almost doubled, and consumer enquiries increased by more than two-fold as demand grew to February levels, which was the pre-crisis time. This is a notable change, according to Property Finder, because it was only recently, during Mid-March, when searches and enquiries for such properties dropped by about 30 percent

“The market is starting to pick up slowly, listings are increasing, consumers are sending more enquiries on properties, out clients are closing deals, some even virtually, and the number of consumers looking for mortgage pre-approvals has increased by over 30 percent,” Abad said.

Haider Tuaima, head of real estate research at ValuStrat, agreed that there has been a growing number of end-users in the UAE who are looking to shift to villas. However, he pointed out, the trend is not new.

“The reason is not recent. According to our research, it goes back to Q1 2019. Since then, we found a steady trend of ready villas were being sold at lower average prices than apartments with same number of bedrooms,” Tuaima told Zawya.

“This is also true for tenants who more from apartments to villas/ townhouse,” he added.

The high demand for villas or stand-alone homes is not only unique in the UAE. In other markets like the United States and the United Kingdom, ultra-wealthy buyers who are looking for good deals or those want to secure their wealth amid falling stock prices are also snapping up mansions and other properties.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

cleofe.Maceda@refinitiv.com

#PROPERTY #UAE #CORONAVIRUS

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© ZAWYA 2020


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