Dubai property booms as rich purchasers escape lockdowns!

The Gulf Emirate was one of the first visitor destinations to be reopened in July last year, combining open doors and strict rules on masking and social distancing villa qatar

The arrival flood has regenerated the tourism sector

DUBAI: Dubai’s property market has a six-year malaise when ‘lockdown dodgers’ and rich foreign investors drive a buy frenzy which breaks records and boosts economic recovery.

Luxury villas are the hottest segment on the market with European buyers looking for homes and golf resorts on the Dubai-style Palm Jumeirah Man-made island.

Dubai’s rollercoaster real estate markets, which have declined steadily since 2014, were flatline following last year’s hit Covid-19 with the emirat slammed to shut its borders, Zhann Zochinke, chief operating officer of the Property Monitor consulting firm.

“We started seeing the transaction volumes increase immediately after the lock-down period, and since then they have really not stopped,” he told AFP.

“We are now seeing record monthly gains and volumes of transactions.”

The Emirate of the Gulf became one of the first destinations for visitors to reopen in July, pairing open door policy with strict rules on masking and social distance and with a powerful vaccination program that has produced some of the highest rates of inoculation worldwide.

Despite an increase in the number of cases involving coronaviruses in the new year following vacationers’ mass descent, life continued as usual with open restaurants and hotels and few of the restrictions that had otherwise affected the lives of people.

“The lockdown of other countries’ dodgers? I think we see a lot of this,” said Zochinke, adding that other draws were relaxed living rules and a decision to allow companies to take full possession of the foreign countries.

The arrival flood has regenerated tourism, a long-standing economic hub in Dubai which has little of the oil wealth that enhances its neighbors and helped its business in April recover to pre-Covid levels, according to IHS Markit.

“Travel and tourism companies have registered the most significant performance bounce, given the growing hope that tourism will increase later in the year, boosted by the rapid deployment of vaccines” said economist David Owen.

The surge in luxury properties in excess of 10 million dirhams ($2.7 million) after years of torpor when homeowners observed the disposal of their equity was striking, with 90 transactions in April compared to around 350–400 regularly every year, according to Properties Monitor.

A palm mansion sold 111.25 million dirhams, the highest price achieved in the area in years, with 16 fronds lined with display halls and supercars parked on the driveways.

The highest price on the block is a large, modern, Italian-inspired villa located on the end of one of the fronds with a beachfront of 180 degrees, offering 100 million dirhams.

Following its tongue on the market in the gloomy days at the height of the pandemic, developers hope to have the infinity pool, private cinema and acres of marble and glass attract one of the new races of European cash-ups.

“I think people are beginning to realize Dubai is no longer just a building site which perhaps we had 10 years ago when we had the most cranes in the world,” said Matthew Bate, CEO of Blackbrick, one of the property’s agencies.

“Many people look at Dubai now and say悠’m going to make it my primary home. I can work in Dubai, still run business in Europe, North America and Asia,” he said.

“So I think what Covid did eventually opened the doors to the rest of the world for us.”

There is nervously about whether the recent giddy rises can be sustained on a market where many fortunes have been and have been lost.

According to Property Monitor, sales on properties over 10 million dirhams increased by 6.7 percent in April compared with the previous month, and 81 villas sold in April alone compared with 54 by 2020.

Even with the considerable gains, the market remains at its 2014 highs and the apartment market is far behind.

However, Morgan Stanley, a financial services firm, said in a recent report that the rally is unlikely to stop soon.

“Strong demand, high supply rates and long lead times for new projects could in the next few years lead to a tighter than anticipated market,” she said.

It credited “a wave of government reforms in the last 12 months, attractive mortgage rates and demand shifts as a result of Covid-19.”