Dubai – Mubasher: Almost 10,000 residential units are expected to be delivered in Dubai this year, in addition to a further 70,000 units before the launch of Expo 2020.
Apartment and villa rental rates dropped by 4% and 3% during the third quarter of 2018, respectively, while sales prices for both property classes retreated by 6%, which is expected to continue until the end of 2019, according to a recent research by Chestertons.
“Without a significant decline in construction activity, a boost in population and short-term economic stimulus, it is unlikely the residential market will have any respite for the remainder of the year, resulting in an expected supply/demand equilibrium scenario in the next 3-5 years, due to the forecasted property pipeline,” head of consulting and valuations and advisory operations at Chestertons MENA Ivana Gazivoda Vucinic said.
During Q3-18, the rental market in the emirate has witnessed the biggest adjustments in smaller units and a consequence of additional apartment supply and greater affordability in larger units, resulting in a 6% quarter-on-quarter decrease in studio apartments.
Studio apartments in Dubai International Financial Centre (DIFC) and Downtown Dubai both recorded AED 67,000 per year, down 11%, the research added.
Meanwhile, Discovery Gardens recorded the lowest rental rate of studio apartments that reached AED 35,000 per annum, a decline of 13% for a studio.
The villa market registered the lowest rental rates in the three-month period ended September for the 3-bedroom units in Palm Jumeriah, Jumeriah Islands, and the Meadows at AED 302,000, AED 235,000, and AED 193,000, respectively.
On the other hand, rental rates remained stable in Jumeriah Golf Estates and the Lakes at AED 245,000 and AED 183,000, respectively.
Meanwhile, leasing rates at Arabian Ranches, the Springs, and Victory Heights fell by 1% AED167,000, AED 153,000 and AED 147,000 per annum, respectively.
At the level of sales, prices maintained slipping over the past months, which is expected to continue for at least another year, according to the report.
Sales of Dubai Silicon Oasis and Dubailand fell by 2% in Q3-18, with prices at AED 716 and AED 740 per square feet, respectively, whereas Discovery Gardens saw a massive decline at 13% with units now available for AED 652 per square feet, the report highlighted.
As for the villa sales market, Palm Jumeriah marked a 5% decrease to AED 2,187 per square feet, while, Arabian Ranches and Jumeriah Park witnessed an 8% drop and the Lakes decreased by 4%.
Villa sales in the Meadows and the Springs went down by 6% to AED 935 per square feet, the report indicated.
The volume and value of transactions for completed units plummeted by 11% and 13%, respectively, during Q3-18.
“This sector is, however, still dominating the market with several attractive incentives including five-year post-handover payment plans, registration fee rebates and guaranteed rental returns contributing to favourable conditions for investors,” the report said.
“The lower number of off-plan launches, coupled with the increased affordability of completed units, has motivated some buyers to consider properties that are available to move into immediately,” Vucinic noted.
