Despite the global pandemic, Dubai has seen “impressive levels” of real estate transactions in recent months, the chief commercial officer of a United Arab Emirates-based developer said last week.
Nakheel’s Aqil Kazim’s comments come even because real estate transactions in the second quarter of 2020 fell 38.8% compared to the same period last year. There were 5,559 transactions in the quarter April to June this year, down from 9,088 in 2019, according to the Dubai Land Department.
Kazim said these were “unusual times”, with the coronavirus health crisis affecting the market. The UAE has reported 62,525 confirmed cases of coronavirus and 357 deaths, according to data compiled by Johns Hopkins University.
“But you know, despite these circumstances, we’ve been witnessing impressive levels of activity in real estate over the last few months,” he told CNBC’s “Capital Connection” on Thursday.
Jetskis pass on Monday, June 8, 2020 through residential clouds on the water in the Dubai Marina district in Dubai, United Arab Emirates.
Christopher Pike | Bloomberg | Getty Images
Transaction volumes for the first half of the year fell 12.4% from the first half of 2019, after rising in the first quarter. The Dubai Land Department reported 15,883 sales from January to June in 2020.
That’s quite an “active achievement,” Kazim said. “As far as Nakheel is concerned, we have even sold more than 800 million dirhams ($ 217.8 million) worth since March, and that is included in the height of the pandemic. This really marks the confidence and confidence of investors in ‘ the real estate sector of Dubai. “
Real estate server firm Asteco said the reduction in the loan-to-value ratio and a “partial release of uplifting buyer demand” resulted in a “direct bounce” in sales after the end of the second quarter, following movement restrictions values are canceled.
Kazim said buyers are looking for larger gardens and living spaces for the ‘new normal’ where people work from home and children learn at home.
“People are actually starting to make that decision to invest in a property that they probably kept in previous years because of this change in buying behavior,” he said, calling these end-user purchases a “promise” for Dubai .
Consulting firm ValuStrat said property transactions could increase in the medium term.
“Price drops, lower lending rates and sweet (loan-to-value) rules may encourage some potential buyers to make a purchase,” it said in a market review.
The emirate is facing a surplus in its real estate market, with prices and rental homes under pressure. Asteco said apartment rental prices have fallen 40% since peaking in the second quarter of 2014.
Rents for apartments, villas and offices could continue to slide, the report said. “Asteco expects that this pattern is likely to occur, or even intensify due to the expected volume of additional supply combined with a potentially sharp drop in demand in the short to medium term due to the impact of COVID on employment.”
.
