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Global Market Insight 01 July 2018

Dubai Market Report, Q2 2018

Report Highlights

Affordability is one of the key real estate trends being realised in 2018 and hence is a core theme in this report. With a large amount of supply set to enter the market, developers need to focus on catering to the largest and most active sectors, namely the mid-income segment. To keep ticket prices of residential property affordable to this audience, developers have been offering competitive payment plans, as well as reducing unit sizes. This trend is already being seen in locations such as Dubailand, Dubai South, Al Furjan and Jumeriah Village Circle.

Sales Prices

The downward price corrections witnessed in Q1, continued throughout Q2. Average apartment sales prices are down 1% from the last quarter, whilst average villa sales prices have remained unchanged. Off-plan sales, particularly in the mid-market segment, continue to dominate the market due to flexible and affordable payment plans turning many renters into buyers.

Rental Prices

Downward rental adjustments continue to take place in the Dubai market, due to several factors; additional stock being delivered thus providing more choices, some tenants purchasing their own properties due to the current affordability and conservative market sentiment. Average apartment rents are down 4% from the last quarter and average villa rents are down 2%. Transactions The number of completed (ready to move in) unit transactions decreased by 3% from the previous quarter, with a 21% increase in transaction value, indicating a lower volume of sales but for a higher ticket size. For off-plan units, transactions increased by 5% from the previous quarter, with a 10% uplift in values.

Market Outlook

The watchword for 2018 is ‘supply’. Whilst the UAE is still experiencing population growth, property supply, however, is growing at a higher percentage than the population. This means the real estate market will most likely continue to soften throughout the rest of 2018.