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An increase in demand for villas and townhouses has been one of the main trends of the new post-quarantine reality for the UAE real estate market, as more and more UAE residents are trying to escape from overpopulated buildings and settle down in spacious quite homes with their own garden full of fresh air in the era of pandemics.
Many recent reports by leading consulting companies confirm this trend. Social distancing has led to the demand for villas, townhouses, and hotel apartments in Dubai and Abu Dhabi having increased by several points over the last few months.
New demand from potential buyers, who are willing to spend AED1 million to AED5 million plus on a private house, or serviced apartment, have been growing since the news about the virus appeared. Tenants have also shown increased interest in similar residential properties.
Such Dubai areas as Dubai South, Springs, Jumeirah Village Circle, Arabian Ranches, Dubailand, Town Square and Mira, where many villas and private houses with gardens and pools are concentrated have become especially popular among buyers.
“We began to see an increase in demand for these unit types almost immediately after the outbreak of the COVID-19, and the demand grew weekly at a rapid pace, while demand for apartments declined,” said Linnett Abbad from PropertyFinder.
“We also observed an increase in the number of search enquiries by such keywords as ‘open space’, ‘garden’, ‘pool’, ‘private patio’, ‘terrace’, etc. These data show that personal space with access to fresh air became a new highly appreciated commodity during the quarantine times, and this trend is unlikely to disappear after the crisis,” she added.
The sharp increase in demand in at least this one sector has become the necessary help UAE real estate market has desperately needed, especially at the background of the nourishing abundant source of foreign buyers having dried out due to coronavirus blockages worldwide. However, even before that, the market was not in its best position due to a huge oversupply.
According to a report by PropertyFinder published recently, the number of real estate sales and rental listings views has increased by 27% and 47%, respectively, over the past four weeks.
In particular, in the first week of May, requests from potential villa buyers in Dubai grew by 46% compared to the same week last year.
As for serviced apartments, in this segment the demand almost doubled to reach the level of February, which was the last pre-crisis month, and search queries for this type of properties more than doubled. This is a noticeable increase, because until recently, in mid-March, demand for these apartments fell by about 30%.
The market is starting to recover slowly: the number of ads is increasing, and potential buyers are sending more and more search requests, and even the number of deals closed, albeit virtually, is also growing, while the number of borrowers, pending prior approval of their housing mortgage, has increased by more than 30%.
Haider Tuaima, head of the real estate research department at ValuStrat, an analytic company, agreed that there are a growing number of homebuyers in the UAE who are interested in acquiring villas, private houses and townhouses. However, he noted that this trend is not new.
“The reasons for this demand are not new. According to our study, it dates back to the 1st quarter of 2019. Since then, we have found a steady tendency for finished villas sales at lower average prices than apartments with the same number of bedrooms,” he said.
“This also applies to tenants, who prefer the option of renting villas and townhouses, when it comes to spacious living space,” he added.
High demand for villas and private homes has grown not only in the UAE. In the US and the UK, wealthy buyers who are looking for great deals, or want to keep their financial assets secured amid falling stock prices are also acquiring mansions and other similar properties.
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