Dubai’s real estate sector continues to attract considerable buyer interest despite growing anxiety over the coronavirus outbreak.
Around 1.3 billion UAE dirhams ($353 million) worth of real estate transactions was recorded in Dubai between April 26 and April 30, according to Dubai Land Department. On Sunday, (May 3), investors poured another 427 million dirhams on property deals, the government agency revealed on social media.
Out of the 300 or more recent transactions registered with the DLD investors snapped flats, hotel rooms and hotel apartments. Buyers also secured office spaces around Dubai.
Analyst have said that Dubai’s property market is beginning to feel the impact of the coronavirus outbreak, as the strict measures designed to curb the spread of infections, such as border closures, and passenger aircraft groundings, are keeping buyers away.
Besides, the growing unemployment, income cuts and company closures, coupled with falling oil prices, are also going to have an impact on investor sentiment.
“Prolonged economic headwinds mainly due to oil price tensions and the global pandemic are likely to continue to weaken employment growth and spending, which will dampen real estate investment,” Asteco said in a new report.
However, according to Appello Real Estate, investors haven’t completely turned their backs on UAE property. Properties on Dubai’s The Palm Jumeirah are attracting particularly high buyer interest.
The agency said on Monday that new project launches at the man-made island, coupled with price discounts on properties, are stirring up enquiries from potential investors.
“We are in fact seeing a decent number of client enquiries for the Palm come directly to us as a company - which speaks volumes,” said Naval Vohra, CEO of Appello Real Estate.
“I think there are two major factors at play. Firstly, the Palm has entered an exciting new phase with launches like Nakheel Mall and the upcoming Royal Atlantis hotel. At the same time, current market conditions offer a golden opportunity to buy property with a slashed price tag - prices in many cases being down even from a few weeks ago,” Vohra added.
The Palm Jumeirah is home to high-end real estate with price tags of upwards of 1.6 million UAE dirhams ($435,000). In recent years, prices in the premium location, along with the rest of Dubai, have been on a decline due to an oversupply glut.
In March this year, apartment prices on the island registered am 8 percent decline compared to the same period in 2019.
Financial advisors had said that people with disposable income should not shy away from investing during the pandemic, citing that current prices are favourable to newcomers.
“Now is a better moment [to invest] than it was probably two or three months ago because the market has dropped massively, and you can get into the market that is going to be cheaper, and that’s a fact,” said Mauro de Santis Bo, Senior Associate at AES International.