The UAE’s property market is expected to recover in the second half of this year, driven by new government initiatives and a widespread vaccination programme, according to a Dubai-based developer.
“The efforts of the government to continue with the vaccination … is definitely having a positive impact on the market and we see that in the sales and the kind of site visits we have,” Jyotsna Hegde, president of Sobha Realty, told The National in an interview. “I am very hopeful and positive on how 2021 is shaping up. By the middle of 2021, there should be a reasonable recovery.”
The UAE is moving ahead with its vaccination programme and is looking to inoculate 50 per cent of its population by the end of March. More than 5 million vaccine doses have already been administered, state news agency Wam reported on Saturday.
Other countries should also “achieve some level of vaccination success by mid-2021 which could open up travel to a large extent in the second half of the year, which should also benefit us positively”, she said.
New government initiatives including the expansion of the 10-year golden visa scheme to encourage foreign professionals to settle in the UAE and the granting of citizenship to investors and talented people will help the market recover, she said.
“These are all exciting developments. This shows the world that Dubai is very investor-friendly and very dynamic. Time taken from thought to action is extremely short and is very encouraging for people to build their businesses and a home here.”
Sobha, which is building a $4 billion Sobha Hartland master development near Mohammed bin Rashid City in Dubai, has set a target of Dh2.5bn in sales in 2021. It has so far achieved sales of Dh250 million in January and February is “progressing well”, she said.
“We had a good mix of international as well as domestic clients in January,” she added.
Apart from the customers from the UAE, GCC countries, India and China “there has been some active interest from markets which were not active before like Europe and Canada”, Ms Hegde said.
“My assumption is that there is an increased interest in Dubai considering the way the Covid situation has been handled, the kind of infrastructure that is provided here. There is a lot of interest from the international community looking for a destination ˗ especially people who are not bound by geographies and people who work out of any place.”
The property market in the UAE slowed in the wake of a three-year oil price slump that began in 2014. Prices have since remained under pressure due to oversupply concerns. The coronavirus-induced economic slowdown further pressured the market in 2020.
Dubai apartment prices fell by 9.5 per cent over 2020, with rents declining by an average of 12.4 per cent. Villa prices, on the other hand, recorded a more moderate drop of 3.6 per cent, with rents seeing an annual 5.3 per cent fall, according to the latest report from Chestertons.
But the property market is showing signs of recovery. The Dubai residential market experienced healthy levels of transactions in January, fuelled by ready unit sales and mortgages, according to the latest report from EFG Hermes.
Total sales of ready units more than doubled to Dh4.3bn in January from a year earlier period, while mortgage transactions increased in value more than seven-fold to Dh9.5bn.
Ms Hegde said the company could only achieve 50 per cent of its Dh2bn sales target in 2020 due to the challenges posed by the pandemic. It delivered 500 units last year and is aiming to deliver 1,300 units in 2021.
Sobha Realty is also planning to start new projects in new locations in Dubai. Ms Hegde, however, refused to divulge details about the new projects.
“All projects will be financed through a mix of debt and equity. All our funding requirements are being currently met by national and international banks.”
The company’s partnership with state-owned Dubai developer Meydan on the District One project in Mohammed bin Rashid City has ended “in an amicable way” after completing phase one of the scheme, Ms Hegde said.