Dubai Real Estate Market Report — May, 2020

Dubai Real Estate Market Report – May 2020

May 2020 sat right inside the acute phase of the UAE's COVID-19 movement restrictions, the point at which the rules suspending most in-person property activity were at their most severe. That context shapes every figure here: deals that rely on viewings, registrations and a physical presence simply could not proceed at anything near a normal tempo.

Taking apartments, villas and commercial property together, Dubai registered 1,326 transactions worth AED 1.96 billion — falls of 57% and 59% respectively versus May 2019. Including every property type, plots among them, the month ended with 1,356 deals amounting to AED 2.35 billion at a median of AED 1,192/sqft.

Headline figures

Year-on-year performance by category

Apartments inflicted most of the harm on the headline. Volume dropped 53% year on year to 1,108 deals — 1,250 fewer than the previous May and the lowest May count in the 7-year series — while value fell 57% to AED 1.36 billion. The prices on the deals that did complete, however, ran the opposite way: the median sat at AED 1,465/sqft, up 6% on the year and the highest May price per square foot in the 7-year series, while the median ticket nudged up 4% to AED 1,035,970. In so thin a month, that mix reveals more about which deals endured the lockdown than about broad appreciation — the transactions that closed tilted toward higher-value primary stock.

Villas dropped more steeply on volume and, in contrast to apartments, lost ground on price too. The 186 villa deals were 65% lower year on year — 341 fewer than in May 2019 and the lowest May volume in the 7-year series — with value down 63% at AED 568.53 million. The median price of AED 655/sqft eased 3% on the year and stands 3% below its 2014 level, while the median ticket softened 7% to AED 1,700,000.

Commercial property was the hardest hit of any segment. Only 32 deals went through, an 82% fall and 149 fewer than the previous May, for just AED 30.54 million in value (down 79%). Prices weakened on every measure: AED 630/sqft was 13% lower year on year and 40% beneath the 2014 base, and the median ticket dropped 29% to AED 487,500. Both its volume and its price per square foot registered the lowest May readings in the 7-year series.

Every category, including plots and buildings

Plots contributed a further 30 transactions worth AED 391.58 million over the month — few in number but weighty in size, with a median ticket of AED 5,650,000 at AED 441/sqft. Land deals on that scale are the reason the all-type value of AED 2.35 billion sits well above the AED 1.96 billion apartment, villa and commercial total.

Primary versus resale

Even in a constrained market, developer sales held up the month. Primary transactions accounted for 78% of both volume and value on the apartment-villa-commercial basis — 1,040 deals worth AED 1.52 billion — against 286 resale deals worth AED 434.05 million, or 22% on each measure. With show-home visits and registrations limited, activity gathered in developer pipelines already under contract.

Where the activity was

Activity was tightly concentrated. Al Merkadh led on both measures by a broad margin — 360 transactions and AED 644.00 million in value — reflecting dense developer activity in the district. Marsa Dubai (AED 205.02 million) and Business Bay (AED 153.29 million) came next by value, while Al Barsha South Fourth (112 deals), Business Bay (107 deals), Marsa Dubai (104 deals) and Al Thanyah Fifth (76 deals) filled out the busiest areas by count.

Rental market

Leasing eased almost across the board. New apartment contracts declined 25.90% to 5,466 with median rents down 17.31% to AED 43,000, and renewals also fell, to 4,131 contracts with rent off 6.48% at AED 56,000. Commercial leasing suffered the steepest drop in volume, its new contracts down 57.52% to 500. The obvious exception was new villa leasing, where the contract count climbed 21.51% to 1,113 even as the median villa rent dropped 21.39% to AED 105,000 — a sign tenants were trading up to space at lower headline rents.

Supply

Development activity leaned almost wholly toward completions. Developers handed over 2,658 units across 7 projects while launching only 171 units in 2 projects — a launch-to-delivery ratio of 0.1 and a net of 2,487 more units delivered than launched, in line with new launches being paused during the restrictions.

Launched

• Alandalus Building G – Me'Aisem First (Jumeirah Golf Estates), 29 units
• Lucky Residences – Al Barsha South Fourth (Lucky Aeon), 142 units

Delivered

• Urbana Ii Stacked House Block-41 – Dubai South (Emaar), 236 units
• Oasis Tower One – Al Hebiah Fourth (Dubai Sports City), 251 units
• Rp Heights – Downtown Dubai (Rp Global), 303 units
• Urbana Stacked House Block-46 – Dubai South (Emaar), 388 units
• Al Haseen Residences – Saih Shuaib 3 (Dugasta), 277 units
• Serena Casa Dora – Wadi Al Safa 7 (Dubai Properties), 578 units
• Arabella 2 - Townhouses At Mudon – Al Hebiah Sixth (Dubai Properties), 625 units

Most expensive sales

Top apartment sales

1. AED 8,063,888 – The Address Residence Fountain Views 2, Downtown Dubai
2. AED 6,400,000 – Vida Residence Downtown, Downtown Dubai
3. AED 6,203,888 – Sunrise Bay Tower 1, Marsa Dubai
4. AED 6,130,000 – The Address Jbr 1 (Jumeirah Gate Tower 1), Marsa Dubai
5. AED 5,400,000 – The Address Residence Fountain Views 3, Downtown Dubai

Top villa sales

1. AED 56,000,000 – Al Merkadh
2. AED 40,829,776 – Hadaeq Sheikh Mohammed Bin Rashid
3. AED 10,000,000 – Wadi Al Safa 6
4. AED 9,887,000 – Jumeirah First
5. AED 9,500,000 – Palm Jumeirah

Notes on methodology

Scope. The headline totals and the category table take in every property category present in the data, Plot and Building included. The primary/resale split, the top-area rankings and the year-on-year series relate to Apartment, Villa and Commercial alone, so those numbers are intentionally smaller than the headline and should not be summed across sections.

Rounding. The headline totals are the definitive rounded figures. Category-level breakdowns are rounded on their own and may not add up precisely to the headline.

Definitions. Price figures represent medians rather than averages. Year-on-year sets the period against the same period twelve months before. All values are in AED; areas are in square feet.