Bayut & dubizzle’s Dubai Real Estate Annual Sales and Rental Market Report for 2020

It’s an undisputed fact that 2020 was a year of unprecedented uncertainty, change and economic turmoil. While the first quarter of 2020 started on a positive note with transactions reaching a whopping AED 20 Billion as per data released by DLD, things swifty became unpredictable with the widespread mobility restrictions that were enforced across the country from March 2020. Initial analysis by trade pundits had suggested that things could take a drastic turn for the negative with the real estate sector expected to see price drops exceeding 20 to 30%. 

However, an in-depth look into consumer trends on Bayut & dubizzle for the Dubai property market in 2020 has revealed the remarkable resilience of the real estate sector in 2020 which was able to successfully adapt to an exceptional situation. Based on the data gathered from two of the leading property portals in the region, the sales and rental markets in the emirate have shown a high level of tenacity, with price reductions staying in line with the patterns observed in 2018 and 2019. Despite early forecasts during the height of mobility restrictions that prices would fall by much higher margins, the market has quickly recovered with price reductions largely being in line with the trends seen across the previous two years.

·According to Bayut & dubizzle’s combined annual sales and rental market reports for 2020, most popular neighbourhoods have reported price declines largely between 2% to 10% for properties for sale, while rental properties have seen reductions between 9% to 17%. 

·In 2020, prospective buyers and tenants in search of affordable housing have turned to the suburbs of Dubai, including Jumeirah Village Circle, Mirdif, Dubailand and Akoya Oxygen. On the other hand, historically-popular neighbourhoods such as Dubai Marina, Downtown Dubai, Jumeirah and Arabian Ranches remain the top choices for luxury properties for sale and rent. 

·According to data released by the Dubai Land Department (DLD), transactions worth over AED 60B were recorded over 2020 of which 20,716 were residential sales transactions worth AED 27.2B.

·Off-plan transactions took the lead in 2020, accounting for 53% of total residential transactions. The off-plan residential transactions in Dubai amounted to AED 14.4B while transactions for ready properties were worth AED 12.8B. While this could be the result of ready property owners evaluating the market situation during the pandemic, it has also highlighted the accessibility of the off-plan market, especially for first-time buyers and smaller investors. 

·Appetite has returned to the market in the second half of 2020, evident from the record-breaking traffic of over 7 million sessions generated on Bayut & dubizzle in a single month during December 2020. 

The government’s AED 7.1 B economic stimulus and relief initiatives have also played an important role in renewing investor confidence and establishing recovery in the market, especially in the second half of 2020.

Timely public health initiatives, competitive prices and attractive incentives from both developers and landlords have also improved market perception among savvy buyers, investors and tenants.

New laws around fractional title deeds and timeshare properties have also paved the path for more smaller investors to enter the market. The fact that the economy was able to quickly pivot, adapt to the demands of the situation and build systems to facilitate processes digitally have played a huge role in enhancing the appeal of the Dubai property market, both locally and internationally.

Properties for Sale

Apartments:

Dubai Marina has firmly maintained the top position for luxury apartment sales, recording 526 sale transactions in the last six months, according to DLD’s data.

• The price-per-square-foot for ready apartments in Dubai Marina has also become more affordable in 2020, declining from AED 1,278.1 to AED 1,170.7.

• Other waterfront communities such as Palm Jumeirah and Jumeirah Beach Residence (JBR) and central neighbourhoods including Downtown Dubai and DIFC have remained popular with HNW buyers and investors, seeing minor price declines between 3% to 10%. 

Jumeirah Village Circle (JVC) has dominated the interest from buyers and investors for affordable apartments in 2020, according to Bayut & dubizzle’s annual report. As per the data released by DLD, 332 sale transactions were recorded in JVC over the last six months alone.

• The average price-per-square-foot for apartments in JVC has experienced moderate declines of 6.1% in line with the market average, reducing from AED 878.3 in 2019 to AED 824.9 in 2020.

• Consumers have also shown interest in Jumeirah Lake Towers (JLT), Dubai Silicon Oasis, Business Bay and International City for investing in affordable ready apartments. These areas have seen price declines between 7% to just under 13% in 2020.

Villas:

Buyers and investors keen on luxury villas for sale have shown the most interest in integrated communities by well-known developers such as Arabian Ranches, Palm Jumeirah, Dubai Hills Estate and Jumeirah Park.

• Arabian Ranches has remained the favourite for upscale ready villas in 2020; the family-oriented villa community registered 164 transactions over the last six months, according to DLD.

• The average price-per-square-foot for villas in Arabian Ranches saw a minor price reduction from AED 889 to AED 872.9

• The luxurious community of Emirates Hills saw its price-per-square-foot decline by 9.6% to AED 1,646.7, which could be attributed to increased competition from newer, upscale developments in Palm Jumeirah and Dubai Hills Estate.  

According to Bayut & dubizzle’s combined analysis, investors with a smaller budget have

turned their attention towards suburban localities, which offer spacious villa properties at competitive rates. 

• The ready villas in Dubailand have emerged as the most popular choice for buying affordable villas, followed by The Springs. The price-per-square-foot in Dubailand has dipped by a slight 2.4% throughout the year, averaging at AED 635.9. 

• Other competitively-priced suburbs such as DAMAC Hills (Akoya by DAMAC), JVC and Akoya Oxygen have also gained popularity, with average price-per-square-foot ranging between AED 550 to AED 850 in these communities. 

Rental Yields in Dubai

• International City has been offering average returns of 8.5% based on projected rental yields, and remained the best option for investors keen on purchasing ready affordable apartments with high ROI. On the other hand, Dubai Marina has also been yielding a healthy ROI of 6.2% for buyers interested in luxury apartments.

• When it comes to ready villa properties, Jumeirah Village Circle and Arabian Ranches have also been yielding good rental returns of 5.9% and 5.5% respectively. 

Off-Plan Projects in Dubai

• According to the data released by Bayut & dubizzle, Rukan has generated the most interest for competitively-priced off-plan apartments and villas in Dubai. 

• In the luxury home market, Dubai Creek Harbour has emerged as the favourite for off-plan apartments while Golf Place in Dubai Hills Estate has captured the attention of buyers looking for upscale off-plan villas. 

Properties for Rent 

Apartments:

Similar to apartments for sale, Jumeirah Village Circle (JVC) has continued to be the most popular choice for budget-conscious tenants in 2020, according to Bayut & dubizzle’s annual report. 

• The rental costs for apartments in JVC have experienced moderate declines between 10% to 17%, averaging at AED 30k for studios, AED 46k for 1-bed apartments and AED 67k for 2-bedroom apartments. 

• Tenants searching for affordable accommodation have also shown interest in older, central neighbourhoods such as Bur Dubai, Al Nahda and Deira, where rental costs have seen declines under 13%. 

As per the trends observed on Bayut & dubizzle, prospective tenants have turned to Dubai Marina as their first choice for luxury apartments rentals in 2020. 

• The average rents in Dubai Marina have become more affordable in 2020, averaging at AED 66k for 1-bed flats, AED 95k for 2-bed apartments and AED 139k for 3-bed flats. 

• Other upscale areas such as Palm Jumeirah, Jumeirah Beach Residence and DIFC have also seen rental costs become more competitive with declines under 17% in 2020. 

• On the other hand, the average rents for larger units in Downtown Dubai have remained steady, averaging at AED 124k for 2-bed apartments and AED 192k for 3-bed apartments.This could be attributed to landlords capitalising on the rising demand for larger living spaces as housing preferences shifted during the pandemic.  

Villas:

Rental costs for luxury villas in Dubai have experienced signs of stability in 2020, as per trends observed on Bayut & dubizzle. 

• Prospective renters have turned to Jumeirah as their first choice for upscale villas, followed closely by Arabian Ranches. 

• The average rents for 4 and 5-bedroom houses in Jumeirah have seen minor decreases under 6%, standing at AED 170k and AED 216k respectively. The 6-bedroom villas in Jumeirah have seen prices become more competitive, going from AED 351k in 2019 to AED 313k in 2020. 

• Al Barsha, Umm Suqeim and Dubai Hills Estate have largely observed minor reductions in rental costs under 7%, while certain bed-types have also seen average rents remain unchanged in 2020. 

Bayut & dubizzle’s annual report reveals that suburban neighbourhoods have been most popular with consumers seeking affordable rental villas in 2020. 

• The family-friendly community of Mirdif has been most searched for area by tenants with a smaller budget. The average rental costs in Mirdif have stood at AED 89k for 3-bed homes, AED 109k for 4-bed villas and AED 116k for 5-bed houses. 

• Other suburbs including Akoya Oxygen, Jumeirah Village Circle and Reem have remained popular options for renters, as has The Springs, which offers reasonably-priced villas in a centrally-located neighbourhood. 

Commenting on the trends for 2020, the CEO of Bayut & dubizzle and Head of EMPG MENA, Haider Ali Khan said: “2020 has been an exceptionally challenging and uncertain year for the real estate fraternity and the world at large. However, we’ve seen interest in the Dubai real estate sector remain consistently high, with both our portals generating record-breaking combined traffic of over 7 million sessions in December alone. Dubai has been able to stay resilient, in large part due to timely measures from the government, including the stimulus plans and deferred payments for off-plan buyers. At Bayut, we have also remained committed to supporting our partnered agencies and the wider industry during this difficult period by offering our services free-of-charge for two months to our existing partners, and extended support to agencies across the UAE who were not even on-board with us, in the form of free listings on the portal, which helped generate over 18.5M impressions and 65,000 leads for their properties. While these decisions definitely impacted our revenue, we made this strategic call to ensure that the entire industry would be in a better place to recover and rebuild when the situation improved, which it did. 

“Despite the difficult situation, it was a milestone year for us at Bayut & dubizzle.We’re immensely proud to be a part of the Emerging Markets Property Group, the only homegrown Unicorn in the Arab World. Two such well-known local brands coming together has definitely been a moment of triumph for the region at large and it has been extremely gratifying to build on our synergies and embark on this ‘stronger together’ journey from our extended office in d3 which is now spread over the 5th and 7th floors. 

“With the organised distribution of the vaccine, the future is looking more and more promising. Dubai has set a global example during the pandemic with extremely efficient containment measures and safety guidelines, and made sure to retain its status as a highly competitive market for investors from across the world.”