Dubai Real Estate Market Report — Q2, 2020

Dubai Real Estate Market Report – Q2 2020

Q2 2020 fell squarely within the acute phase of the UAE's COVID-19 lockdown, when movement restrictions halted much of the in-person activity that property deals rely on. Dubai nonetheless registered 5,420 transactions worth AED 10.78 billion at a headline median of AED 1,025/sqft, yet the pandemic's mark runs through every line of the data.

Across apartments, villas and commercial property, volume dropped -37% year on year to 5,153 deals and value fell -43% to AED 8.60 billion against Q2 2019. This was a quarter shaped less by a price crash than by a transaction freeze, its sharpest exception in the commercial segment.

Headline figures

Year-on-year performance by category

Apartments accounted for the bulk of the fall in absolute terms. The segment logged 4,073 deals, down -35% year on year and 2,175 below the prior Q2, marking the lowest Q2 volume in the seven-year series. Value dropped a similar -34% to AED 5.53 billion. Pricing, though, points the other way: the median reached AED 1,320/sqft, up +3% over the year and +6% on 2014 — the highest Q2 price per square foot in the seven-year series — while the median ticket crept up +1% to AED 1,005,888. The apartments that did trade leaned toward firm, prime pricing even as deal counts collapsed.

Villas traced the same volume path but without the pricing boost. Transactions totalled 951, down -38% and 576 beneath the prior Q2 — once more the lowest Q2 volume in the seven-year series — as value slid -34% to AED 2.95 billion. Villa pricing simply stood still: the median of AED 675/sqft was flat year on year (0%), though still -11% under its 2014 level, while the median ticket inched +1% higher to AED 1,794,000.

Commercial was the segment where the freeze turned into an outright break. Volume collapsed -71% to a mere 129 deals and value tumbled -94% to AED 127.68 million — a far sharper drop than either residential type. Unlike apartments and villas, commercial pricing moved with volume: the median fell -21% to AED 552/sqft, the lowest Q2 price per square foot in the seven-year series and -47% below 2014, with the median ticket off -12% to AED 621,000.

Every category, including plots and buildings

Plots were the quiet counterbalance to the residential slump. A mere 267 plot transactions carried AED 2.18 billion in value — a sizeable share of the quarter's total from only a handful of deals — reflecting a steep median ticket of AED 3,653,674 at a median of AED 410/sqft.

Primary versus resale

The primary market held up the quarter. Off-plan and developer sales made up 78% of both volume and value — 3,997 deals worth AED 6.68 billion — leaving resale with the remaining 22%, or 1,156 transactions worth AED 1.92 billion. With in-person viewings curtailed by the lockdown, developer channels able to contract and complete remotely took the bigger share.

Where the activity was

Al Merkadh led the market on both measures, heading value at AED 1.25 billion and volume with 551 transactions. Marsa Dubai placed second on each (AED 1.08 billion and 502 deals), trailed on value by Downtown Dubai (AED 700.18 million), Business Bay (AED 575.04 million) and Palm Jumeirah (AED 472.83 million). By volume, Al Barsha South Fourth (409), Business Bay (401) and Wadi Al Safa 5 (296) completed the busiest districts.

Rental market

Leasing held firmer than sales, and renewals fared better than new lets. New apartment contracts dropped -28.15% to 15,945 with the median rent down -17.31% to AED 43,000, while renewals eased a milder -19.35% to 13,014 with rent off just -8.29% at AED 55,000 — a sign tenants stayed put rather than move mid-lockdown. Villas were the exception: new villa contracts actually climbed +13.97% to 3,174, even as the median new villa rent fell -22.22% to AED 105,000. Commercial leasing took the hardest knock, new contracts down -46.38% to 1,778.

Supply

Supply captured the lockdown in miniature: hand-overs kept coming while new launches nearly ceased. Developers completed 5,380 units across 16 projects, yet launched only 298 units across 3 projects — a launch-to-delivery ratio of just 0.1, leaving 5,082 more units delivered than launched.

Selected launches

• Alandalus Building G – Me'Aisem First (Jumeirah Golf Estates), 29 units
• Binghatti Point – Nadd Hessa (Binghatti), 127 units
• Lucky Residences – Al Barsha South Fourth (Lucky Aeon), 142 units

Selected completions

• 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
• Qpoint Liwan-Plot Mu005 – Wadi Al Safa 2 (Mazaya), 656 units
• Oxford Residence 2 – Al Barsha South Fourth (Deyaar), 147 units
• Plazzo Heights – Al Barsha South Fourth (Plazzo), 116 units
• Golf Views Podium – Dubai South (Emaar), 296 units
• Wadi Tower – Wadi Al Safa 4 (Ilyas & Mustafa Galadari), 207 units
• Banyan Tree Residences Hillside Dubai – Al Thanyah Fifth (Sweid & Sweid), 250 units
• … and 6 further projects

Most expensive sales

Top apartment sales

1. AED 80,000,000 – Q - Zone (Qpoint - Phase 3) Mu007, Wadi Al Safa 2
2. AED 40,000,000 – Serenia Residences Building A, Palm Jumeirah
3. AED 18,600,000 – Bluewaters Residences 6, Marsa Dubai
4. AED 14,979,710 – Bluewaters Residences 4, Marsa Dubai
5. AED 12,992,240 – Bluewaters Residences 1, Marsa Dubai

Top villa sales

1. AED 60,000,000 – Al Merkadh
2. AED 48,000,000 – Um Suqaim Third
3. AED 40,829,776 – Hadaeq Sheikh Mohammed Bin Rashid
4. AED 32,856,200 – Emirates Living
5. AED 29,360,000 – Palm Jumeirah

Notes on methodology

Scope. Headline totals and the category table span every property category recorded in the data, Plot and Building included. The primary/resale split, top-area rankings and the year-on-year series cover Apartment, Villa and Commercial only, so those figures are deliberately smaller than the headline and should not be summed across sections.

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

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