DUBAI: Dubai’s property market is powering out of a six-year malaise as “lockdown dodgers” and wealthy international investors drive a buying frenzy that is breaking records and fuelling an economic recovery.
Luxury villas are the hottest segment in the market, with European buyers in particular seeking homes on Dubai’s signature Palm Jumeirah man-made island, as well as golf course estates, report agencies.Dubai’s rollercoaster property market, which had been in steady decline since 2014, went into flatline after COVID-19 hit last year and the emirate slammed shut its borders, said Zhann Zochinke, chief operating officer of consultancy Property Monitor.
“Then straight after that lockdown period we started to see transaction volumes increase, and they really haven’t stopped since,” he told AFP.
“We’re now seeing record month-on-month gains and transaction volumes.”
The Gulf emirate became one of the first destinations to reopen to visitors last July, pairing the open-door policy with strict rules on masking and social distancing, and an energetic vaccination program which has produced some of the highest inoculation rates globally. Despite a surge in coronavirus cases in the new year after holiday-makers descended en masse, life has continued largely as normal with restaurants and hotels open, and few of the restrictions that have blighted life elsewhere. “The lockdown dodgers from other countries? I think we’re seeing a lot of that there,” Zochinke said, adding that other draws were more relaxed residency rules and a decision to allow full foreign ownership of firms.
The flood of arrivals has regenerated the tourism industry, long an economic mainstay of Dubai which has little of the oil wealth that powers its neighbours, and helped business activity recover to pre-COVID-19 levels in April, according to IHS Markit. “Travel and tourism firms recorded the most notable bounce in performance, amid increasing hopes of a rise in tourism activity later in the year, boosted by the rapid vaccine roll-out,” said the research firm’s economist David Owen.
After years of torpor when homeowners watched their equity drain away, the surge in luxury properties above 10 million dirhams (US$2.7 million) has been striking, with 90 transactions in April compared to around 350 to 400 on a regular yearly basis, according to Property Monitor.A mansion on the Palm has sold for 111.25 million dirhams, the highest price reached in years in the precinct which features 16 “fronds” lined with show-stopping houses and supercars parked in the driveways.