Dubai's real estate market bottomed out last November and the first six months of 2021 confirmed a V-shaped sector recovery, according to a new study by investment and technology platform SmartCrowd.
The total volume of transactions in the first half of 2021 in the Dubai residential property market increased by 74% compared to the first half of 2020, while the value of real estate transactions increased by 113% over the same period.
A combination of various factors appears to have increased the volume and value of transactions in Dubai in the first half of this year. While nothing is guaranteed yet, we expect investor confidence generated by the combination of these factors to continue to grow through the end of the year, said SmartCrowd CEO Siddiq Farid.
Based on the report, finished real estate objects have attracted the most attention from investors. They accounted for 72% of the total volume of transactions compared to 28% of transactions with unfinished off-plan objects. The demand for finished housing has also helped drive up prices per square meter for affordable properties by 10%.
However, the average price per square meter of off-plan real estate under construction fell 3.42% compared to the first half of 2020.
Due to the lack of a large number of new real estate offers in the most popular areas of Dubai and prices at the level that was last observed in 2011, the market is experiencing positive dynamics and, as a result, an increase in demand for existing real estate, Farid said.
The SmartCrowd report also mentions that the man-made island Palm Jumeirah saw 34% growth in real estate transactions and 221% growth in transaction volume, while the JLT region saw the highest growth in transaction volume, at 262%.
Dubai is a unique market where some areas of the city perform better than others. Given this state of affairs, one of the advantages of investing in real estate is investing through crowdfunding, which guarantees diversification of the investment portfolio - investments can be distributed in several directions and follow the general market trends, instead of "putting all your eggs in one basket" by investing all in one object, - said Farid.
It is worth noting that the villa segment in Dubai has seen one of the highest sales levels as people prefer more spacious living spaces with space for outdoor activities.
SmartCrowd research found that in the first half of the year, the average sales of completed villas in Dubai increased by more than 19.3%. Likewise, prices for off-plan villas rose 9.3%.
As for apartments, finished sales prices rose 8.7% year on year, while prices for apartments under construction fell by an average of 9.5% compared to the same period last year.
Thus, we can conclude that investor sentiment is improving, and personal finances are also starting to recover. While real estate investment in Dubai may still be out of reach for some, crowdfunding investments allow people to get a piece of real estate for as little as AED 2,000 (€460.92). Real estate crowdfunding is a growing trend that can become the main catalyst for the development of the real estate market in the region.
