Prices for Dubai homes dip below 2017 level
Apartments now cost Dh1.2m against last year’s Dh1.32m, while villas are at Dh1.9m
Property buyers in Dubai seem to be in the mood for bargain picks — average transaction prices during third quarter of 2018 were lower than the 2017 average, according to a new update from the consultancy Cavendish Maxwell.
It means that the 2018 third quarter average deal was in the range of Dh1.2 million for apartments and Dh1.9 million for villas/townhouses.
In comparison, average transacted price for apartments in 2017 was Dh1.325 million and Dh2.45 million for villas/townhouses, according to official data.
As such, during the third quarter, 26 per cent of offplan transfers for apartments in the first nine months of this year were between Dh1,200-Dh1,500 a square foot. (In the third quarter, sales prices recorded a 1.3 per cent decline for apartments and 1.4 per cent for villas.)
For ready properties, the average for units sold was between Dh500-Dh800 a square foot.
One reason for the lower price points could be because budget-conscious buyers are heading for locations such as Jumeirah Village Circle, which will see more than 1,500 new homes completed by end of the first quarter of 2019.
Another factor for the lower city-wide average could be that end-users are making their presence felt, especially in newly emerging residential areas and where the developer/seller asking price is lower. And with most developers — at least those with a pressing need to reduce their unsold stock — offering Dubai Land Department fee waivers and locked-in service charges, buyers believe they are getting a good deal for themselves.
“Approximately 72 per cent of the upcoming supply over the next six months is expected to be handed over during fourthquarter 2018,” the report says, and this will also be felt on city rentals. “Increasing handovers will continue to impact rents in most locations across Dubai as tenants have more choice. This will also impact occupancies in existing stock and should be factored into net yield estimations [by landlords].”
Apart from Jumeirah Village Circle, the locations with a fairly high level of incoming supply would be Business Bay, Sports City, Silicon Oasis and Nshama’s Town Square multi-phase development. What of rents? The locations that saw significant erosions were clusters in Dubailand, The Greens, Motor City, Arabian Ranches and Victory Heights, according to to the report. Over the 12 months up to end September, the dips there averaged nearly 7 per cent.
“Rent decline is expected to continue during the last quarter and beginning of 2019, with new handovers planned in both freehold and leasehold communities,” the report notes.