By Accommodation Times Bureau
RICS Dubai in its report ” Dubai Residential Market” Special Edition presented at Cityscape citing Propertymonitor, a Dubai based Research Portal said that the sales for June 2017 was mere 704. The Research paper said that July 2017 was a highly active month for off-plan apartment transactions with a total of 2,221 transfers. February 2017 was also particularly active for off-plan villa/townhouse transactions with 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 Report further said Rent declines for residential properties in Dubai continued this year, with 12 month declines averaging 3.4% for apartments and 4.7% for villas/townhouses. 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.
The RICS Dubai in its research report said “Price 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. 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.