January sees subdued property sales in Dubai

Dubai's off-plan property sales slowed down in January. The volume of off-plan sales dipped 28 per cent and the value of such transactions decreased 40 per cent in January compared to a year ago, according to data released by GCP-Reidin.

Only a handful of developers launched new projects last month, including Emaar Properties and L-I-V Real Estate Development. This comes in the wake of an astounding year for off-plan sales in 2017. According to Chestertons Mena, off-plan transactions increased 60 per cent in 2017.

"In terms of residential property transactions, off-plan dominated the market throughout 2017. Going forward, we expect the off-plan market to decrease as the addition of new supply would suggest it will be ready units that will see an increase in demand," said Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons Mena.

"The main trend we will see in 2018 is that the secondary market will overtake the off-plan market in terms of deals done. With more handovers coming up of affordable housing, there will be a huge buzz and demand. What a lot of buyers will be waiting for is handover so they can secure 75 per cent finance and move forward with a purchase.

Off-plan will still have a big part to play in the market, but after the acceleration in 2017 of this sector, we can expect some drop off in what is announced or launched, which is a natural way for the market to go," says Lewis Allsopp, CEO, Allsopp & Allsopp.

In January 2018, 1,645 offplan deals were registered in Dubai compared to 2,281 units 12 months ago, says GCPReidin data. In terms of value, off-plan sales worth of Dh2.04 billion were transacted in January 2018 in contrast to sales worth Dh3.375 billion 12 months ago. Communities that performed particularly well for off-plan sales were Meydan (up 3,043 per cent), Dubai World Central (119 per cent), Jumeirah Village Circle (115 per cent) and Town Square (29 per cent) and Dubai Creek Harbour.

It seems that developers are being cautious about off-plan launches to factor in for the VAT effect. It will be hard to see the off-plan market perform to the same extent as it did in 2017.