Dubai: It’s clear that for one Dubai resident the pandemic hasn’t had much of an impact on income. This resident, who wishes to remain anonymous, rented out a Signature Villa on the Palm – for Dh900,000.
That’s the costliest rental in Dubai’s property market all through August, according to Jason Hayes, CEO of LuxuryProperty.com.
“The Palm has always been a destination of high renown – it is an iconic work of landscaping and engineering and offers a lifestyle quite unlike any other part of Dubai,” he added. “The Palm fronds are among the most exclusive addresses in the city. And Frond G is one of those very perfect locations, providing views of the Atlantis resort and placing homeowners/residents within easy reach of the popular Palm Boardwalk.”
Paying Dh900,000 for such a privilege is well worth it for some. According to John Lyons, Managing Director at Espace Real Estate, which leased the property, "The tenant started the viewing process with a budget of Dh500,000 - but after several viewings, the decision was made to rent the more expensive option.
"It was truly a COVID-19 era process as the viewing was done virtually from another country..."
In terms of property sales, a Bvlgari home on Jumeira Bay was the costliest August deal – at Dh36.5 million. “Without a doubt, the new homeowner will see tremendous capital appreciation in the medium to long-term at this price point,” said Hayes. “Owning a home at Bulgari is quite a fantastic deal in itself.
“This is the largest Bulgari property in the world, located on a private island, with immediate access to the upscale Jumeirah district and a short drive to Downtown Dubai.
"August saw an 11.3 per cent lift in transaction volumes compared to the same period last year," said Hayes. "This equates to Dh4.7 billion worth of business and represents a 2.2 per cent monthly increase on July figures."
After facing the worst of the pandemic between March to June, even that 2.2 per cent month-on-month gain is a relief.
Time to upscale
Once the lockdown measures eased, Dubai’s property market did see an increase in transactions, both sales and rentals. Much of it was pent up demand; but there was a clear shift in preference for bigger units, and if the tenants/property owners had the means, then preferably homes with some green space coming with it.
“The mood clearly is to scale up – and it’s possible because rents are down by more than 10-15 per cent since the start of the year,” said one leasing agent. “Sure, there are some homes that have seen increases in rental or sale value – but these are the minority.
“Locations such as Dubai Hills and Meydan are seeing a lot of interest. People are also going well outside of city outskirts in search of homes with more living space than the average. The Dubai South, where MAG’s project has proved a hit, is a beneficiary.”
Earlier this week, more than 300 three- and four-bedroom homes at Majid Al Futtaim’s ‘Tilal Al Ghaf’ gated community in Dubai were snapped up in about 48 hours. These represented the third and final round of sales at the project, with the units priced from Dh1.2 million.
“Tilal Al Ghaf (which will have a lagoon and even a beach feel) clicked because of the price points,” said an estate agent. “There is significant pent-up demand because a lot of residents are deciding to finally become homeowners. The pandemic seems to have decided it for a lot of new property buyers.
“It’s not just a Dubai happening – releases by Sharjah’s Arada in recent weeks too have clicked.”
Prices on Palm and some other key areas in Dubai have stabilized, and with the lack of available secondary inventory, we predict a further period of price stabilization... and possible shoots of recovery.