Dubai Property Resurgence – SmartCrowd Report Outlines V-Shaped Recovery

  • H1 2021 Dubai Residential Property Report reveals a 74% increase in transaction volume (H1 2020 – 21,462 transactions vs H1 2021 – 37,352) and a 113% rise in value of property transactions (including mortgage transactions)
  • Villas in the Emirate witness average price increases of 19.3% on ready property sales and a price rise of 9.3% on off-plan sales

SmartCrowd, the DFSA-regulated property investment and technology platform, has unveiled the results of its inaugural Dubai Residential Property Report for the first half of 2021. The most important findings indicate that Dubai’s property market appeared to ‘bottom out’ in November 2020 and that the first half of 2021 reflects a V-shaped recovery for the Emirate’s residential property sector. Dubai’s residential property market has seen a 74% increase in overall volume of transactions in H1 2021 compared to H1 2020, while the value of property transactions has increased by 113% in the same period.

Speaking about the rebound of the property market, CEO and co-founder of SmartCrowd, Siddiq Farid said, “A combination of factors appears to have strengthened the volume and value of transactions in Dubai during the first half of this year. Government policies to introduce attractive visa and residency schemes for investors and professionals are starting to bear fruit, incentives to support entrepreneurs and the private sector, proactive safety measures to combat Covid-19, and visionary thinking for events such as EXPO 2020, have underpinned investor appetite for real estate in Dubai. While nothing is guaranteed, we expect that confidence to continue to grow for the remainder of the year.”

Ready properties commanded the most attention from investors with 72% of overall deals in completed homes, against 28% off-plan. Demand for ready stock also helped drive per square foot prices for available properties up by 10%.

Farid continued, “With a lack of new supply in Dubai’s most popular areas and pricing at levels last seen in 2011, there is positive sentiment in the market and a resultant boost in demand for existing properties.”

Conversely, average off-plan price per square foot took a dip by 3.42% compared to H1 2020, but this can be attributed to new supply focusing on affordable housing segments and thus putting downward pressure on average pricing.

The report also looked more closely at specific areas and segments in Dubai. Palm Jumeirah has shown a 34% uptick in the value of property transactions and a 221% increase in volume of transactions, while JLT saw the highest increase in transaction volume of 262%.

Farid explained, “Dubai is a unique market with some pockets of the city performing better than others. One of the advantages of investing in real estate via crowdfunding is diversification of your portfolio – you can spread investment over a number of areas and follow the overall trend of the market, rather than putting all your eggs in one basket in a single property.”

Dubai’s villa segment has posted some of the strongest sales performance, as people’s preferences have shifted to larger living spaces, with room for outdoor activities. SmartCrowd research shows that the sales average for ready villas in Dubai has increased by over 19.3% from AED 758.4 per square foot in H1 2020 to AED 905.1 per square foot in H1 2021. Similarly, off-plan sales prices of villas have grown by 9.3% from AED 684.8 per square foot in H1 2020 to AED 748.4 per square foot in H1 2021. For apartments, ready sales prices have increased by 8.7% year-on-year, while off-plan apartment prices have dropped on average 9.5% compared to the same period last year.

Farid concluded, “Crowdfunding properties can help to further stimulate the market and support developers with their sales efforts. Investor sentiment is returning, and personal finances are beginning to recover too. While investing in an entire property in Dubai might still be out of reach for some, investment via crowdfunding allows people to take a fraction of a property from as little as AED 2,000. Crowdfunding in real estate is an accelerating trend and has the potential to be a major catalyst for the region’s property market.”

  • Transaction figures: Dubai Land Department (DLD) + analysis from REIDIN.
  • Property transactions include mortgage transactions

About SmartCrowd Limited:

SmartCrowd is an easy-to-use tech platform that provides a smart, low-cost way for people to invest in real estate. The business was established in Dubai in 2017 and quickly attained recognition as the recipient of the Accenture Innovation Award. The business was granted a sandbox license from DFSA in 2018 and was one of the first to graduate to a fully licensed and regulated platform in November 2019. SmartCrowd levels the playing field for investors of all incomes to grow wealth through intelligent property investment. Its highly-secure, trusted and regulated platform enables a borderless marketplace for investors to access opportunities in real estate. With clear, credible fees and pricing, SmartCrowd is committed to providing transparent, affordable property investment for all.