Dubai Real Estate Market H1 2020

    The first half of 2020 was pretty shaken up by the corona virus. Logically, this has also hit the real estate market in Dubai. However, let's take it one step at a time...

    The real estate market started the 'Expo Year' 2020 in a good mood. There was great optimism, with the expectation that the real estate market could rehabilitate or even get a further boost in the middle of the year or at the beginning of the Expo. The signs were good - transaction records were broken (February 2020) and demand has increased strongly, especially in the off-plan market.

    Q1 2020 | Off-Plan (in 2019)
    January 2020 - 1,342 (1,361)
    February 2020 - 2,746 (1,708)
    March 2020 - 1,506 (1,888)

    Q1 2020 | Secondary Market (in 2019)
    January 2020 - 1,280 (1,121)
    February 2020 - 1,452 (1,340)
    March 2020 - 1,449 (1,231)

    However, the coronavirus also arrived in Dubai in mid-March 2020. Due to drastic measures taken by the government, lockdowns and entry bans have been imposed. As a result, the real estate market has more or less come to a standstill in one fell swoop - who would have ever thought that... only a few transactions have been made. Despite all this, statistics still recorded nearly 1,500 real estate transactions in May 2020.

    Q2 2020 | Off-Plan (in 2019)
    April 2020 - 1,293 (1,395)
    May 2020 - 962 (2,034)
    June 2020 - 1,094 (1,730)

    Q2 2020 | Secondary Market (in 2019)
    April 2020 - 466 (1,481)
    May 2020 - 453 (1,265)
    June 2020 - 1,147 (941)

    In mid-June 2020, the long-awaited relaxations became fact. Except for the general mask requirement, all prohibitions and regulations were massively relaxed.
    Accordingly, real estate transactions have increased again. Most importantly, the rental market has recovered and gained additional momentum. Many households that had been living in apartments are now looking for a house with a garden (consequence of the strict lockdown of 4 weeks in total).

    Prices, purchase prices and rents have all fallen slightly on average over the last six months compared to the last six months, but not in all areas of the city.

    Once again, it shows that 'Location and Quality is Key!' Specifically, properties in good locations have once again held up well and remained stable in price terms.

    Our assessment of the situation with a view

    Beyond the summer, Dubai still has some challenging months ahead. As temperatures start to drop, tourists, businessmen and 'fresh' expats are expected to arrive in Dubai, with the result that property demand will start to rise again.

    The expected real estate demand by the end of 2020 will compensate for some of the existing oversupply, but will not yet show a positive impact on prices (rents and purchases).

    Purchase prices for properties in good and very good locations will at best fall slightly. In less prominent and popular locations, we believe there is more room for downward movement. The prices of rental properties are already pointing the way here.

    With regard to the postponed Expo 2020, now October 2021 - April 2022, Dubai will attract tourists, media and investors next year. Preparations are going on at full speed and the government wants to realize a superlative Expo.

    Property prices in comparison. Dubai is still one of the most attractive real estate locations worldwide with reasonable prices per square meter. In this context, the moderate prices per square metre ensure yields of 5-8%.

    Conclusion:After three quiet 'Corona months', we have noticed an increased demand from German-speaking countries since July. In addition to pure real estate inquiries, whether for personal use or as an investment, we are also repeatedly approached with company formations or residence visa questions. Here we would like to refer to the 33 most important questions, which we constantly update and are therefore still valid.