Dubai sees rise in off-plan property sales

Dubai registered a 45 per cent increase in the sales of off-plan residential properties in the first quarter of the year, compared to the previous quarter, a new report has found.

According to the report by Chestertons, the number of transactions for ready properties in the emirate grew by 4 per cent on average during he period.

Overall, transactional activity – for both ready and off-plan units rose by 25 per cent quarter-on-quarter in Q1.

The value of the transactions during the period also increased by 31 per cent to Dhs12.28bn.

Ivana Gazivoda Vucinic, head of Advisory and Research, Chestertons MENA said: “In the first quarter we witnessed positive movement on the residential transaction side for both transaction values and volumes. This is partly due to the increase in incentives and payment plans created by developers to make it more financially amenable for investors to purchase property.

“The increased number of transactions was followed by increased transactional value, an indication that price points are now more in line with buyer expectation.”

The report also found that apartment sales prices grew by 3 per cent on average in Q1 compared to the previous quarter, with properties in the emirate’s affordable areas seeing “substantial” price rises.

Dubailand recorded an average increase of almost 20 per cent, from Dhs760 per sqft in Q4 2016 to Dhs904.2/sqft, while prices in Dubai Sports City climbed 15 per cent on average to Dhs1,053 per sqft.

In contrast, apartments in The Greens and JVT saw prices drop by an average of almost 5 per cent.

Meanwhile villa prices recorded an average overall drop of 1 per cent.

While Palm Jumeirah posted a 7 per cent rise in prices, prices of villas in The Meadows/The Springs dropped by an average of 10 per cent in Q1.

Robin Teh, UAE country manager and director of Valuations and Advisory at Chestertons MENA said: “We’re seeing several of the newer communities in Dubai become more established and with this an increase in interest from investors.

“They offer a range of amenities and good connectivity which has undoubtedly piqued the interest of potential home owners. They are also in a price bracket much less than centrally located developments and therefore appealing to those with more limited budgets or looking to downsize.”

Residential rents across the emirate dropped marginally in Q1. While average apartment rents dropped by 1 per cent across the emirate, villa rentals also fell by 1 per cent on average.

Looking ahead, 15,000 new units are expected to be delivered to the market in 2017, following the addition of 16,000 units last year.

However, the market is not anticipated to face any oversupply issues.

Gazivoda Vucinic said: “Early signs are showing that the residential market is on its way to recovery. Increased transactional activity and slightly higher or stabilised prices are showing that investors have increased confidence in the Dubai market.

“With a growing population and ever-present foreign investors’ appetite, we expect the forecasted units due for delivery this year to be easily absorbed by additional demand.”