The UAE's furniture and fit-out companies are benefiting from the upward swing in the real estate market as we enter an era of positive post-pandemic growth.As the UAE real estate market becomes more sophisticated and refined, with more contemporary style homes, demand and prices are steadily rising. Dubai has become a very fashionable and desirable place for those looking to live or invest in a waterfront holiday home in the sun.
Downtown Design speaks to Helen Tatham, Savills Associate Director – Head of Community Sales & Leasing Dubai and Swapnil Pillai, Associate Director, Research from Savills, one of the country’s leading real estate firms, about the current buoyancy in the market.
Dubai Hills Estate
Q: What are the prevailing reasons that Dubai is enjoying a boom inresidential real estate sales?
A: As companies and individuals were adjusting to new living and working patterns, we started observing offshoots of growth in the residential sector from the end of April 2020. We witnessed a gradual increase in demand, especially during the second half of 2020. In Dubai, residential transaction activity was up by 22 per cent in the second half of 2020 compared to H1 2020, and the momentum has continued into 2021. Total residential units transacted reached 10,750 in the first quarter of 2021, an increase of 12% year on year.
Dubai Hills Estate
Q: To what do you attribute this growth?
A: A relaxation in Loan to Value (LTV) laws encouraged more investment appetite. Banks also increased their exposure to realestate and the construction sector, and there was a spike in remortgage activity due to attractive borrowing rates and other promotions.Additionally, lifestyles have changed. People are spending more time at home, and they place greater value on ‘home’ and a greater need for additional space to allow for homeworking.
The Nest, Al Barari
Q: Do buyers prefer move-in-ready properties, or are off-plan properties more popular?
A: There is now greater demand for ready properties. Traditionally, off-plan projects made up 60-65% of overall transactions. However, over the past six months, almost 65% of transactions were for ready-to-move properties.
The Nest, Al Barari
Q: Who are the main buyers?
A: Demand is coming from end-user buyers, primarily first-time buyers, locally or from overseas. We’re seeing an increase in inbound UAE residents leaving Europe and an influx of high-net-worth individuals seeking to purchase luxury second homes.
Q: What is the outlook for the rest of the year?
A: The outlook for the rest of 2021 is likely to include continued demand for townhouses, villas and high-end apartments, which will squeeze available supply levels and potentially continue to push up prices.
Volante Tower, Business Bay
Q:Why are residences with water views the first to get snapped up by savvy buyers
A: Dubai offers a fantastic outdoor lifestyle for most of the year, hence the attraction to being near a beach.Best-in-class developers have seized the opportunity to deliver high-quality, modern, contemporary-style living in order to attract buyers from all over the world.
Q: In real estate, they say it’s all about ‘Location! Location! Location!’, how important is design and architecture to investors?
A: There's a growing trend towards more contemporary building designs, which are more efficient and sustainable. Developers offering modern, compact and well thought-out properties are experiencing clear advantages.
Q:Many of Dubai’s ‘older’ homes are being bought in order to be renovated, boosting the furnishing and fit-out sectors. Is there increased demand for such properties?
A: Most of the initial freehold supply in Dubai is now in mature and established communities.The majority of the transactions across completed properties over the last six to nine months were concentrated across these established communities in the south and east [of the city]. With a further expansion of city limits expected over the coming years, these properties stand out as lucrative investment opportunities.
Q: What are the main design and technology elements that buyers are looking for?
A: Dubai has come a long way in terms of design over the past decade, with many developments modelled on other international hotspots. Previously, master developers chose Mediterranean-styled communities to attract expatriate buyers. However, the popularity of contemporary-style properties has become apparent. Newer properties now feature floor-to-ceiling windows, large balconies, white gloss finishes, wooden floors and state-of-the-art smart home systems.