Property Market Report: Q1 2019

We just started off the new year and already we’re done with the first quarter of 2019. In these past 3 months, we witnessed a steady flow of sales in the Dubai real estate market. We noticed a slight pick-up from the previous quarters as buyers and investors are once again taking an interest in investing, especially as we only have a year left to highly anticipated Expo 2020. We analyzed data from several reputable sources and produced a report on how the market has changed from the end of 2018 to this new quarter.

Dubai’s Most Popular Areas – Apartments

Buying and Renting

According to Property Monitor and other property portals, most Dubai areas maintained their popularity among residents. Dubai Marina, Downtown Dubai, and International City continued to be the most popular districts for buyers. We saw a slight dip of 2 to 3.5% in sales prices for Dubai Marina and Downtown Dubai, and a dip of 5 to 6% for studios & 1-bed apartments. However, there was a rise of 1.4% in prices for 2 bedroom apartments in International City. Even though we saw a fall of prices in major areas, the number of sales still didn’t pick up with only 953 sales in January. The market has however still recovered in February and March with almost 1500 transactions in each, surpassing secondary market transfers.

There is an added interest in buying in International City because of how affordable the apartments are coupled with the high ROI average of nearly 9.7% which is the most in Dubai.

Screenshot (224)

Even with no significant changes in rental rates, Dubai Marina still managed to be the favorite choice for residents and tenants alike. Al Nahda and International City were the 2nd and 3rd most popular choices for tenants in Dubai. Even though there were no rental changes from the previous quarter for studios and 1-bedroom apartments in Dubai Marina, residents saw a drop in 2-bedroom rental rates. Bur Dubai, Deira, and Downtown Dubai were other areas that proved to be popular among residents.

Dubai’s Most Popular Areas – Villas and Townhouses

Untitled design

Villas and townhouse enthusiasts chose Arabian Ranches, Palm Jumeirah, and Dubailand as the most popular areas to buy. Arabian Ranches saw a significant drop in sales prices, especially for 3-bedroom villas which droped 7% from Q4 2018, while there was a high ROI of at least 5.8%. Speaking of ROI, The Springs features the highest ROI of at least 6.3%.

3-bedroom villas in Dubailand also a dipped at least 6.9% which is why investors took an interest in buying or investing in these particular areas. The Villa, The Springs, and Mudon were other areas that were the most popular among buyers.

The trend for buying villas and townhouses were low compared to previous quarters with off plan sales being much lower in contrast to the secondary market transfers, but by February and March, the sales started picking up at a consistent rate, until they were equal to the rate of secondary market transfers.

Screenshot (226)

When it comes to renting villas and townhouses, Mirdrif, Arabian Ranches, and Jumeirah seemed to be the most popular choices for tenants. According to data, most villa rental prices remained unchanged from the previous quarter, especially for areas like Mirdiff and Arabian Ranches. However, 3-bedroom villas in Jumeirah, had a rise of 6.3% in rental prices. Al Barsha, The Springs, and Umm Sequim were among other popular areas for residents that preferred villas for rent.

We noticed Dubai going through a soft landing when it came to sales trends, but with this new quarter we notice a climb especially for sales.

Abdullah Al Ajaji - Managing Director of Driven Properties

Taking a look at this quarter and predictions for the market.

“Dubai Land Department transactions in Q1 2019 were significantly higher compared to Q1 2018. The number of inquiries to our agency went up by at least 40%. Equally, the number of transactions and transaction values went up significantly during Q1 2019 vs. Q1 2018. Property completion and handovers, assuming that there are no cancelled projects, will accelerate in 2019, 2020, 2021, and 2022. However, with private developers are pushing the brakes, 2023 and beyond will see very limited supply in the market. This will further boost sentiment. If we look back from 2014, the sentiment was down and therefore property prices lost value in anticipation for future handovers. Lagging vs. leading indicators will show an opposite sentiment going forward. The market now knows that 2019-2022 will be a period of many handovers, but can also assume that very little will be delivered afterwards. Meaning, the negativity surrounding future handovers is very likely to already be priced into asset values."