Last week, the commercial director of a real estate developer based in the United Arab Emirates said Dubai had seen “impressive levels” of real estate transactions for several months. by.
Nakheel’s Aqil Kazim comments are given even when real estate transactions in Q2 2020 plummeted 38.8% over the same period last year. There were 5,559 transactions in the quarter from April to June this year, down from 9,088 in 2019, according to the Dubai Department of Land.
Kazim said this was “an unprecedented moment,”; with the coronavirus health crisis having an impact on the market. The UAE reported 62,525 confirmed cases of coronavirus infection and 357 deaths, according to data from Johns Hopkins University.
“But you know, despite these cases, we’ve seen impressive levels of real estate activity over the past few months,” he told CNBC’s “Capital Connection” on Thursday.
Jet skateboards pass through skyscrapers in a residential on the coast in Dubai Marina district in Dubai, United Arab Emirates, on Monday, June 8, 2020.
Christopher Pike | Bloomberg | beautiful images
Trading volume for the first half of the year was down 12.4% from the first half of 2019, after rising in the first quarter. The Dubai Land Administration reports sales of 15,883 from January to June 2020.
It was a “positive performance,” said Kazim. “As Nakheel is aware, we have personally sold the property worth more than 800 million dirhams (217.8 million USD) since March, and that includes during the peak of the pandemic. This really highlights the confidence of investors in Dubai’s real estate sector. “
Real estate services firm Asteco said reducing the loan-to-value ratio and “releasing part of pent-up buyer demand” led to “immediate increase” in sales at the end of the quarter. second, after the movement restrictions are lifted. .
Kazim said buyers are looking for larger gardens and living spaces for the “new normal” where people work from home and children study at home.
“People were really starting to make a decision to invest in a property they might have held back in previous years because of this change in buying behavior,” he said. This end-user purchase is a “commitment” to Dubai.
Consulting firm ValuStrat says real estate transactions could go up in the medium term.
“Lower prices, lower lending rates and sweet rules (lending by value) may encourage some potential buyers to buy,” it said in a market review.
The emirate had to deal with oversupply in its real estate market, with price and rental pressures. Asteco says apartment rents have fallen 40% since their peak in Q2 / 2014.
The report said apartment, villa and office rents may continue to decline. “Asteco predicts that this paradigm is likely to dominate, or even increase, due to the expected addition of supply combined with demand likely to plummet in the short to medium term due to the effects of COVID towards employment. “