Dubai or no to buy

The Middle Eastern financial centre has seen a shift toward single-family living in the wake of the pandemic

Two units at the luxury Dubai high-rise Il Primo sold for nearly AED60 million (US$16 million) in the third quarter of 2020, as the luxury market rebounded from a lockdown that hindered sales throughout the spring, stated a report released in late October.

Prime residential deals in the Middle Eastern financial hub totaled AED7.4 billion from the three months from July through September, surging nearly 50% from the AED5 billion recorded in the prior three months, according to data from Luxhabitat Sotheby’s International Realty, which defines luxury as homes in 13 high-priced neighbourhoods, such as the Palm Jumeirah and Downtown Dubai.

The two apartment sales at Il Primo, a luxury tower in Downtown Dubai, last quarter tied for the fourth most expensive residential transactions of 2020. They follow three mega-mansions, which all sold for north of AED60 million.

While sales have recovered from the pandemic-induced lockdown, the market is still down compared to a year ago, as global travel restrictions and reduced tourism have hampered the country’s real estate market. Prime sales volume in the third quarter is down about 27% from the same time last year, according to Mansion Global analysis of Luxhabitat data.

Pockets of the city, however, continue to see strong transaction levels. Sales volume on the Palm Jumeirah, a man-made island shaped like a palm tree, whose waterfront mansions, saw AED1 billion in sales in the third quarter, up from a year ago. Mohammed Bin Rashid City, in the heart of Dubai, logged the most activity last quarter, with AED2.2 billion in sales, also up from a year ago.

Dubai home prices, which have slumped for half a decade, continued to fall in the third quarter. The average price per square foot came in at AED1,194, down another 10% from just the second quarter—though the report’s authors viewed the price shift as positive evidence of a surge in buyer activity.