D esiden ar epor ept D esiden ar epor ept · 2019-03-14 · 6 7 Dubai Residential Market Report - September 2017 Dubai Residential Market Report - September 2017 oper 2017 opertymonitor.me

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Dubai Residential Market Report - September 2017 Dubai Residential Market Report - September 2017

© Property Monitor 2017 | propertymonitor.me The UAE’s only real estate intelligence platform offered by accredited property professionals

ForewordProperty Monitor is the UAE’s only real estate intelligence platform offered by RICS accredited property professionals, Cavendish Maxwell. It gives us great pleasure to be working alongside Cityscape as their official data partner for the 16th edition of Cityscape Global. Our data and intelligence service is aimed at increasing transparency in the UAE marketplace. Agencies, developers, banks and consultancies can access real-time data, across multiple data points, and expert intelligence in order to make more informed decisions, based on actual transactions, valuations and trends. Property Monitor offers users the ability to search up-to-date residential sales and leasing transactions, off-plan sales, commercial transactions, valuation data as well as our professional opinion on achievable prices, across all major areas of Dubai and Abu Dhabi.

Contents• Dubai House Price Index

• Price performance

• Rent performance

• Transactions overview

• Supply overview

54



Villa/Townhouse Apartment

5M

4M

3M

2M

1M

0K

Ave

rag

e Sa

le P

rice

AED

Dubai House Price Index

Average apartment prices across Dubai have continued to trade within a close range of AED 1.2 million to AED 1.4 million over the last 12 months, while average prices for villas have moved down from AED 3.7 million in August 2016 to AED 1.98 million in August 2017. Lower priced villas, some at starting prices of AED 1 million, have primarily contributed to this change and more units in this category are expected to be added to the market.

Meanwhile, consumer demand continues to shift in favour of communities with existing infrastructure and amenities, with developer track record becoming a key factor in maintaining price and rent levels. Developers have begun responding to this reality through differentiation at several levels of their product offering, ranging from launch price to unit sizes, payment plans, development phasing and more. VILLAS/TOWNHOUSES APARTMENTS

AED 1.98 million AED 1.35 million

Average sale price from July - August 2017

The era of “build and they will come” is making way for properties that are more responsive to end-user demand and catering to a wider base of buyers, as seen in the entry of lower priced villas during the first half of this year.

Note: Dubai House Price Index tracks residential property transactions across the Emirate to derive average sales prices for apartments and villas/townhouses taking into account new supply that gets added each quarter.

Source: propertymonitor.me

Q1-

2008

Q2-

2008

Q3-

2008

Q4-

2008

Q1-

2009

Q2-

2009

Q3-

2009

Q4-

2009

Q1-

2010

Q2-

2010

Q3-

2010

Q4-

2010

Q1-

2011

Q2-

2011

Q3-

2011

Q4-

2011

Q1-

2012

Q2-

2012

Q3-

2012

Q4-

2012

Q1-

2013

Q2-

2013

Q3-

2013

Q4-

2013

Q1-

2014

Q2-

2014

Q3-

2014

Q4-

2014

Q1-

2015

Q2-

2015

Q3-

2015

Q4-

2015

Q1-

2016

Q2-

2016

Q3-

2016

Q4-

2016

Q1-

2017

Q2-

2017

Q3-

2017

Dubai House Price Index - Sales Price (AED) from the period January 2008 to August 2017

Average villa/townhouse prices are now AED 2.2 million due to the increased supply of affordable units.

76



Price performancePrice declines continued during the first eight months of this year, with twelve month declines averaging 1.45% for apartments and 1.29% for villas/townhouses.

Rent performanceRent declines for residential properties in Dubai continued this year, with 12 month declines averaging 3.4% for apartments and 4.7% for villas/townhouses.

Apartment rent performance180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

Dubai

Marina

The V

iews

The G

reens

Jumeir

ah Bea

ch Re

siden

ce

Jumeir

ah La

ke To

wers

Busine

ss Bay

Downto

wn Burj

Khalifa

DIFC

Dubai

Sport

s City

Motor C

ity

Discov

ery G

arden

s

Intern

ation

al City

(Clus

ters)

Studio Rent 1 BR Rent 2 BR Rent 12 month % change Source: propertymonitor.me

Villa/townhouse rent performance

Jumeir

ah G

olf Es

tates

Jum

eirah

Islan

ds

Jumeir

ah Pa

rk

The L

akes

The M

eado

ws

The S

pring

s

Arabian

Ranc

hes

Victor

y Heig

hts

Al Furj

an

3 BR Rent 4 BR Rent 5 BR Rent 12 month % change Source: propertymonitor.me

-2.4

-4.7

-6.5

-2.5

-4.3-4.4

-3.3

-3.0-3.0

-3.6

-3.2

-4.8

Apartment price performance

Intern

ation

al City

(Clus

ters)

Discov

ery G

arden

s

Jumeir

ah Vi

llage

Circ

le

Uptow

n Moto

r City

Jumeir

ah La

ke To

wers

The G

reens

Dubai

Marina

Busine

ss Bay

The V

iews

DIFC

Downto

wn Burj

Khalifa

Average sales price AED / sq ft 12 month % change

Dubai

Sport

s City

Average sales price AED / sq ft 12 month % change

Jumeir

ah Bea

ch Re

siden

ces

Villa/townhouse price performance

3,000

2,500

2,000

1,500

1,000

500

0

Al Furj

an

Dubai

Silico

n Oas

is

Jumeir

ah Vi

llage

Trian

gle

Green C

ommun

ity M

otor C

ity

The S

pring

s

Jumeir

ah Pa

rk

Arabian

Ranc

hes

Jumeir

ah G

olf Es

tates

Jumeir

ah Isl

and

The F

ronds

(Gard

en H

omes

)

0.0%

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

-3.0%

The M

eado

ws

The L

akes

Victor

y Heig

hts

-4.3

-5.2

-4.7

-5.1

-6.6

-3.3

-5.4

-4.3

-5.7

Prices for properties in established communities with limited upcoming supply, such as Dubai Marina and DIFC, have held stronger than emerging neighbourhoods with significant upcoming supply, such as Dubai Sports City and Jumeirah Village Circle.

Current price levels have encouraged buyer activity, especially from end users, with year-to-date transactions surpassing 2016 levels, in particular for under-construction properties. Dubai Land Department data puts total off-plan transactions for apartments and villas between January to August 2017 at 16,173 versus 9,878 transactions over the same period in 2016.

The introduction of lower priced villa inventory in the market, through communities such as Reem Mira and offerings in Dubailand, is expected to put pressure on larger apartment units as softening rents could fuel migration to these new villa communities. Additionally, a sizeable volume of new supply, currently under construction in GCC freehold locations such as Al Barsha 2 and 3, Al Barsha South and Al Warqa’a, will put further pressure on the declining villa rentals. Meanwhile, larger villa units will continue to face occupancy pressure. This pressure comes from senior executives who historically occupied these units, as they are now opting for smaller units due to reduced housing allowances.

To avoid long vacancy periods, landlords have been offering incentives such as payment through multiple cheques and first month rent-free. The scheduled upcoming supply is expected to continue impacting rents in the emirate. Alongside this, pressure on occupancy and the upcoming introduction of VAT, will affect household income levels and hence rent contributions.

-2.0%

-2.5%

-3.0%

-3.5%

-4.0%

-4.5%

-5.0%

-5.5%

-6.0%

-6.5%

1.0%4,000

0.0%3,500

-1.0%3,000

-2.0% 2,500

-3.0% 2,000

-4.0% 1,500

-5.0%1,000

-6.0%500

-7.0%0

-1.4

-0.4

-3.7-4.2

-0.9 -1.1-0.9

-2.3

-0.7

-2.5

-3.3

-2.2

-7.0

-1.3

-2.5

-1.0 -1.0

-0.5

-1.5

-1.8-1.7

-1.0 -1.0

-0.6

-1.6

-1.3

-3.0%

500,000

600,000

700,000

-4.0%

400,000

-5.0%

300,000

-6.0%

200,000

-7.0%

100,000

-8.0%

0

-9.0%

-10.0%

98



Transactions overviewOff-plan sales account for majority of the total transactions between January to August 2017

July 2017 was a highly active month for off-plan apartment transactions with a total of 2,221 transfers. February 2017 wasalso particularly active for off-plan villa/townhouse transactionswith new launches in Dubailand and communities in Reem Mira accounting for the majority of transactions during the month.

June had the lowest amount of secondary market transactions in the past two years with 704 sales. Mid-income buyers who are new to the market have opted for off-plan units as they are more affordable, whereas most units in the secondary market are still selling at a premium. This is one of the reasons why we are seeing a low number of transactions across Dubai for secondary transactions.

The current momentum in sales activity is driven by a larger proportion of end users than before, particularly first-time buyers, who are entering the market enthused by low prices and encouraged by attractive payment plans offered by some developers. The introduction of new innovative mortgage products by some local banks has also contributed towards this increased activity. Prices and accessibility criteria for home mortgage, traditionally the two biggest barriers for new entrants to the property market, have been lowered, thus resulting in an uptick in market activity.

4,321VILLAS/TOWNHOUSES

20,144APARTMENTS

Sales volume Jan - Aug 2017

Villa/townhouse transactions

Apartment transactions

1250

1000

750

500

250

0

2250

2000

1750

1500

1250

1000

750

500

250

0

Num

ber

of t

rans

actio

nsN

umb

er o

f tra

nsac

tions

Sales Volume - Secondary market transfers Sales Volume - Off-plan



Jun

2016

Jul 2

016

Aug

201

6

Sep

201

6

Oct

201

6

Nov

201

6

Dec

201

6

Jan

2017

Feb

201

7

Mar

201

7

Ap

r 20

17

May

201

7

Jun

2017

July

201

7

Aug

201

7

Jun

2016

Jul 2

016

Aug

201

6

Sep

201

6

Oct

201

6

Nov

201

6

Dec

201

6

Jan

2017

Feb

201

7

Mar

201

7

Ap

r 20

17

May

201

7

Jun

2017

July

201

7

Aug

201

7

Sales Volume - Secondary market transfers Sales Volume - Off-plan

904

157

1,15

119

8

97

270

74

138

92 118

89 136

133 18

7

121

130

135

585

122 14

6

465

124

245

150 20

9

80

188

67

221

62

350

1,17

2

640

1,56

1

686

1,00

6 1,20

3

1,58

8

858

664

981

875

875

1,34

2

945

1,56

6

1,73

5

1,13

4

1,52

8

893

1,21

3

1,04

3

1,57

0

624

1,08

2

789

2,21

1

804

2,08

1

927

Dubai Land Department Transactions

1110



Residential supplyApproximately 5,600 residential units have been handed over across Dubai during the first half of 2017.

As of August 2017, approximately 24,400 units are scheduled for handover for the remainder of the year, though actual completions may vary

significantly. Historically there has been a considerable gap between the number of units announced for completion and actual handovers.

Some projects are delayed as a result of financing issues, contractual disputes, and licensing and approval delays. Developers are also adopting

staggered delivery schedules to align handovers with demand and project sales potential and to avoid flooding the market with units that cannot

be absorbed. Developers are expected to continue phasing the delivery of projects by focusing on absorption of limited released units before

more supply is brought to the market.

The key locations for upcoming supply this year are Dubai Marina, Damac Hills, Jumeirah Village Circle, Dubai Sports City, Al Qouz and Business Bay which all have over 2,000 units expected to be handed over by the end of 2017. The Property Monitor Supply Tracker shows that 85% of upcoming supply this year will be apartments and 15% villas/townhouses.

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M: +971 50 894 7880E: [email protected]

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D esiden ar epor ept D esiden ar epor ept · 2019-03-14 · 6 7 Dubai Residential Market Report - September 2017 Dubai Residential Market Report - September 2017 oper 2017 opertymonitor.me