After a buoyant start to the year for the Dubai property market with record-breaking sales on an almost weekly basis, property consultants at leading real estate company haus & haus have reflected on some of the key trends seen across Q2.
“We’re not just in the business of buying and selling, we’re in the business of offering insights and perspectives and much of our analysis comes from what our property consultants see on the ground,” commented Simon Baker, Managing Director, haus & haus.
Overall, the Dubai real estate market in Q2 continued to be strong, with demand outstripping supply across residential sales and leasing. This is great news for sellers but has created some spin off challenges for both landlords and tenants in the leasing market.
Whilst off plan developments continue to provide outstanding investment opportunities, buyers must be ready to act fast – with some new releases selling out within minutes.
According to Property Monitor, there were circa 6,500 re-sales registered for transfer in Q2, with strong sales across both villas and apartments.
“Buyer registrations are continuing to outweigh sellers on the market, so we noticed that properties vacant on transfer sold extremely well throughout the quarter,” said Charlie Bannan, Sales Director, haus & haus.
He also noted that four of the top six villa and townhouse communities with the most sales are Emaar developed and managed, according to the latest Property Monitor statistics. These include Emirates Living communities like Springs, Lakes, and Meadows, as well as Dubai Hills and Arabian Ranches 1 and 2.
“Emaar knows how to create communities with all the facilities and maintenance that help them to thrive, which reassures buyers that their investment will be fruitful now and in the future,” said Bannan.
LONG TERM LEASING
“The leasing market in Q2 – as well as for all of 2022 – has been heavily impacted by the positive sentiment in the sales market,” said Thomas Poulson, Leasing Director, haus & haus.
But what does that really mean? Demand is again outstripping supply as landlords make the decision to sell while the market is hot, leaving tenants who have been served the twelve months notice period looking for a new home.
“Tenants are often having to find properties that are more expensive than where they’re currently living and maybe even smaller in size, maybe lacking the upgrades that they once had and maybe not having a private swimming pool anymore, for example,” said Poulson.
On the flipside, landlords who have long term tenants locked in at what are now lower than market rates, are finding the limits to annual rental increases frustrating.
“What we’re finding is that landlords are opting to sell the property as they’re unable to achieve the current rental price as legally they’re not allowed to re-rent the property for two years after serving the vacating notice to the tenant,” commented Poulson, explaining that this is further reducing the available properties on the market for rent.
These trends are reflected in the statistics for Q2, with Property Monitor reporting that key communities are showing continued rental increases – Jumeriah Park up by 7% (that’s 22% in the last 12 months) and Jumeriah Golf Estates increasing another 6% across Q2 (making it a 23% increase across the last 12 months).
In April there were some of the highest average rental prices on record in recent years.
“Demand for Dubai off plan is currently outstripping supply as the emirate becomes increasingly attractive due to ongoing instability across Europe,” explained Simon Baker, Managing Director, haus & haus.
“Emaar continues to dominate the market with their broad range of quality developments – their new Beachfront development being especially popular. The new Address development was sold out in literally minutes with tens of thousands of buyers all vying for the 400 available units.”
He added: “Damac has also been selling well in Q2, with their recent Damac Lagoons project. Villas and townhouses at very attractive price points have been bringing in end users and investors alike.
“Downtown, Business Bay, and the Dubai Creek Harbour are also very popular with our clients due to their central location and future amenities. Which is reflected in the numbers we see from Property Monitor as these locations make up the top three areas for off plan sales in Q2.
“However, despite all this demand, it is refreshing to see that the big developers are holding steady on prices and helping with stability in the market and ensuring that off plan purchases are an attractive, stable option for long term investors.”