“Selling Sunset”, the Netflix reality series about marketing high-end properties in Los Angeles, has been a huge summer hit. The show really illustrates the appeal of the real estate industry.
And while there’s no avoiding that the sector has been impacted by Covid-19 here in Dubai, the market has had – and continues to have – some unexpectedly positive results. Maybe Los Angeles isn’t the only place where sunset can be sold.
The first half of 2020 saw transactions worth the equivalent of 16.3 billion in real estate in the city; during that period, Dubai Marina saw the highest number of those sales transactions, worth 770 million. The average purchase price was 253,000 for an apartment and 550,000 for a villa. Women accounted for a substantial share of the number and value of investments made, totalling 1.51 billion.
Dr Michael Waters, Associate Professor in real estate at Dubai’s Heriot-Watt University, says it’s been good news for investors, especially over the longer term:
“From 2012 to the current day, anyone who’s invested in Dubai has seen an annualised return of about 8.5% per annum. So in the Global Competitiveness Index, which is a way of ranking global cities and their attractiveness, Dubai has moved from 29th place to 6th place within the last few years”.
There’s also growth at every budget level, including some of the most expensive properties in the world. New community developments have been a big draw with buyers flocking to places like Dubai’s town square.
Fred Durie, CEO of Nshama Property Developers says his company has worked hard to provide excellent investment opportunities for buyers:
“We wanted to give people the opportunity to buy a property at an affordable price so they could move from rental to owning.
“But at the same time, the facilities had to be good. If they rent, the money is lost. If they own, then when they retire or when they leave Dubai, they have an asset which they can sell”.
There’s a real shift in the number of first-time buyers in Dubai; many of them are people who had previously rented, but now see this as the perfect time to get on the property ladder.
Richard Waind, Managing Director of Betterhomes, says his company has been very busy over the summer – and believes it’s been a direct result of lockdown:
“We all spent five to six weeks stuck at home, looking at where we’re living, reassessing our space and all the rest of it.
“And I think a lot of people started thinking: ‘what’s out there?’ And when they started looking at what’s out there, they saw some really good value in the market”.
Despite COVID-19 having had an obvious impact on the third quarter of 2020, there are questions as to whether the industry has bottomed out.
Fibha Ahmed, Sales Director at Bayut and Dubizzle, is confident things are moving in the right direction:
“In the next six to eight months. I would say, this is going to become a buyer and a renter’s market. People are going to continue to buy their first homes here”.
For many, COVID-19 has led to job or income losses and financial instability. But for those with cash reserves, they see the current moment as an ideal time to buy.
Maya Wimbury, a first time buyer in Dubai, thought it was the best time to make the move:
“My husband and I were looking at the house prices just as COVID happened, and we thought ‘actually if we do this, our outgoings will go down by 40 to 50% every month'”.
While 2020 has been a difficult year for the global sector, in Dubai, analysts are keen to see the bounce from the upcoming Expo for signs of further recovery.
Chris Speller, Group Director, at CityScape and Informa markets is optimistic:
“My prediction is that we will start to see a gradual return to confidence in the market, much quicker, and when I say that I really believe that come (the first quarter of 2021), we will start to see real confidence coming back into the real estate markets”.
And it’s that confidence that investors and end users are banking on. The long term impact of COVID-19 on the global economy remains unclear. But all eyes will be on the real estate industry industry in the coming months.