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Global Market Insight 01 April 2018

Dubai Market Report, Q1 2018


Q1 witnessed continuing corrections in sales prices with apartment and villa prices falling by 5% on average representing the highest quarterly decline in apartment sales prices since 2014. The communities with the highest declines were Business Bay (-9%) and Dubai Silicon Oasis (-9%) in terms of apartments and Palm Jumeirah (-8%) and the Meadows and the Springs (-8%) in terms of villas. The number of new launches declined during the quarter with the majority of developers aiming to deliver the current pipeline before 2020.


Rental rates for both apartments and villas fell by 2%, highlighted by a 4% decline in the Greens (apartments) and Palm Jumeirah (villas). The scale of the decline was evenly spread across different unit types, as opposed to the previous quarters where the larger units were more severely affected.


Chestertons’ Q4 2017 Observer predictions have been proven to be accurate. Overall, the volume of transactions fell by 10%, while values also fell by 9%. The declining demand for off-plan properties continued as the number of transactions decreased by 19% compared to Q4 2017 while transaction values decreased by 16%. The number of completed unit transactions increased by 10% from the previous quarter reflecting only a 2% increase in transaction value, indicating a decline in average ticket sizes. Dubai Marina continued to be the most popular community in terms of completed unit transaction volumes and values while Business Bay dominated the off-plan sales market.


With substantial pipeline stock due to be released to the market, the moderate economy and population growth rate, further declines in sales and rental values are expected. In addition, Off-plan sales transactions are expected to decline further, with completed unit transactions being driven by end-users rather than investors due to shrinking rental yields.