Despite all the odds, such as inconveniences caused by Covid-19, the real estate sector in Dubai does not show any sign of retention. In 2021 it is anticipated that the city would build 39,000 apartments. This is an 8 percent rise from 2020. In 2019, Dubai saw 31,000 homes comprising: 23,600 apartments and 7,400 villas.
- Drivers of growth
Unit demand’s main elements include improving buyer confidence, good market feelings, and decreasing property prices. As the industry changes quickly with regular forecast revisions, the developers endeavor to adapt to the new standard.
The government plays a crucial role in stimulating property demand. The government’s initiative to boost demand for property has been exhausted, such as – co-habilitation legislation, FDI legislation, lower interest rates, Expo 2020, Golden Visa changes and the resumption of trade relations with Qatar. This extraordinary milestone has led to resilience development in the secondary market as transaction volumes have increased, mainly from end-user purchasers. In 2021, the secondary sales transactions are projected to be strong as lower capital values, flexible visa restrictions and social and financial reforms support the underlying demand.
- Covid’s impact -19
Covid-19 initially hampered the price recovery, but not for long. The market rebounded significantly with a rise in sales prices with values in numerous districts approaching development costs. The demand for villas has increased enormously, as buyers are yearning for spacious buildings with open spaces. However, it is difficult for immobilizers to satisfy the growing demand for villas.
The real estate market is still revitalizing from the corona virus headwinds. Sales prices have begun to show resiliency as development costs have achieved value in several locations.
Apartments still have a hopeful future to reflect. A rapid decrease in apartment demand will result in excessive supply, which will damage pricing. The rental values would most likely remain low during 2021.
- Dubai’s worst-hit areas
Areas with neighborhoods suffered the most significant price blow. That covers Downtown Dubai and Palm Jumeirah (-4 percent) (-4 percent).
In 2020, Discovery Garden (-15%) and Dubai (-15%) were the lowest-performing regions in Dubai.
Compared with 2014, when prices peaked, villas fell by 31%, and apartment areas fell by 35%.
- A Big Relief Sign:
The good news for the UAE real estate business is that, despite the barriers that arose in 2020, secondary market transactions grew by 7% compared to 2019 numbers. The loan goes to the cheap cost of purchase and favorable government policies. The final two months (December 2020 and January 2021) saw the most significant monthly volume of transactions since 2018 due to the many government limitations on mobility.
Demand for off-plan properties in 2020 decreased by 32 percent year-on-year as buyers do not take any more risks and prefer to buy ready-to-speed properties. This leads to numerous significant players in the real estate market retreating into new projects because of a lack of demand.
Twelve new skyscrapers were welcomed in Dubai to adorn the skyline:
The majestic skyline of Dubai welcomed 12 new 200 meter high towers under the Covid era in 2020. This will improve investor confidence and speed up the building sector in the region.
- Global figures
A total of 106 200m-plus buildings were built in 2020 compared to 133 in 2019. The experts take responsibility for this decrease as construction work is closed most of the year.
China accounted for almost half of the total 200 meters-plus buildings built-in 2020 at 56, followed by Dubai at 12. The US had ten buildings in third place, and the UK had five skyscrapers in third place.
- Built-in Dubai in 2020, Tallest Buildings
SLS Dubai, 336m high, was finished as the tallest building in 2020, followed closely by Jumeirah Gate at 308m and Amna Tower at 307m.
- The destiny of the UAE in 2021
According to Global Data, the Building growth projection is projected at 1.9% for 2021 and 4.1% for 2022. Global Data continues with a 3.1% rise in 2021 and a promising medium-term view for building output growth in the UAE.
The analysts anticipate that in 2021, after the damage produced by Covid-19 in the UAE, the buildings sector will be experiencing poor growth. The new Dubai Building Code’s approval is fantastic news for the industry since it establishes a new set of buildings norms with great emphasis on cutting building costs.