Dubai property prices drop slightly in Q3, more supply expected

Dubai’s residential sales market saw a minor dip in prices in the third quarter of the year, with sale values down by around 1 per cent, according to the latest report from real estate consultancy CBRE.

However, transactions have seen a rise. As per data from the Dubai Land Department, the total value of residential transactions increased by approximately 11 per cent in H1 over the same period last year, driven by growth in overall transaction numbers, which rose by close to 29 per cent.

Meanwhile, the residential leasing market also recorded a slight drop in rates of around 1.5 per cent from the previous quarter, the report said.

However, there were “notable variations” in performances at a sub-market level.

“The disparity between rising deal volumes and the performance of the leasing sector, demonstrates how investors appear to be taking a longer-term view on the residential market, looking beyond softening rentals and focusing on the availability of attractive prices and the increasing flexibility of payment plans offered across both completed and off-plan projects,” said Mat Green, head of Research and Consulting UAE at CBRE Middle East.

The report also found that future supply levels continue to grow, with an array of new projects announced during the quarter.

Those include a new joint venture between Meydan and Sobha Group, ‘The Residences’ in Mohammed Bin Rashid City, Nakheel’s ‘Palm Residences’, and Wasl’s new flagship development ‘Wasl One’ located in Al Kifaf area.

According to reports, construction activity across Dubai is set to increase further over the next two years, with approximately Dhs350bn worth of contracts likely to be awarded prior to Expo 2020.

“Developers in Dubai have been particularly active in the residential sector with JLL data suggesting up to 80,000 units could be delivered before the end of 2019, although actual deliveries are likely to be below this level, the report added.

Also read: Checking the pulse of the Dubai real estate market