Affordable units spur Dubai realty sales
“However, there was an increase in number of transactions in the secondary market by 13.75 per cent. The average price per square foot also went up by 2.5 per cent for secondary market units. Currently, the average price per square foot in the overall market for villas is Dh802 per square foot and for apartments is Dh1,010 per square foot,” said Luxhabitat report.
“Off-plan registration volumes increased by 17.3 per cent from the previous quarter to Dh 8 billion. There was a 21 per cent increase in number of transactions and an average price per transaction recorded at Dh1,314 per square foot. The average price for an off-plan villa is Dh1.5 million and for an apartment is 1.2 million,” Luxhabitat report said.
According to Luxhabitat’s analysis, the prime residential market in third quarter totalled Dh10.2 billion, which is approximately 16 per cent lower than the previous quarter.
Price declines in Abu Dhabi were slightly less steep than Dubai, averaging 15 per cent for apartments and 12.7 per cent for villas/townhouses over 12 months. The average annual rental decline for both apartments and villas/townhouses was 13.7 per cent for the same period. The Northern Emirates continue to be impacted by falling rentals and sales prices in Dubai and Abu Dhabi. Supply remains the primary driver for price declines with developers attempting to entice buyers with attractive payment plans, said Cavendish Maxwell.
In the rental sector, office rents continued their decline into the third quarter with landlords settling on lower effective rates and providing incentives. In third quarter, businesses have continued to restructure their operations and limit exposure to real estate by consolidating multiple offices spaces into one. The office market in the capital saw rents decline 2-3% on a quarterly basis on muted interest from the oil and gas sector which is one of the bigger tenants. Due to Dubai’s oversupply and rental climate, rents in the Northern Emirates have also been under pressure.