2018 DUBAI MARKET OVERVIEW

2018 DUBAI MARKET OVERVIEW

Known for its glamorous luxury villas and skyscrapers, the Dubai property market is overstocked and has shown stability over the past years, particularly in the residential sector where prices have dropped from a peak in mid-2014.

As far as the property market is concerned, 2018 was definitely in line with what Dubai had experienced in the past. Unlike past years, the constant reduction of prices was a common fact across almost all of the UAE communities.

A Great Array Of Opportunities

This present market correction has created some uncertainty for the industry, investors, and property owners alike. For costumers, this continues to be a big win allowing them with good options now more than ever. In actual fact, these are healthy market movements which are only significant when inhabitants are factoring in the lasting viability of getting a home in Dubai. As a result, this contraction has permitted most of these inhabitants to ponder whether they’ll keep throwing their money away on rent or if it’s preferable to get their own houses.

According to the head of one of Dubai’s leading brokerages, property prices are presently below construction costs. So, irrespective of what you think might happen in 2019, purchasing in this market symbolizes a remarkable intrinsic value. Perhaps, a good sale pitch but with rents at 2014 levels having endless options for both renters and buyers, there’s a big chance for a beneficent outcome to this ongoing correction.

2018 Property Landscape

Over the past year, developers engaged themselves in more aggressive marketing schemes which led to the steady growth of the market. Agents equally competed in what has developed to an increasingly congested market place with many project handovers and launches. So, given the diversity of investors in the real estate sector, the global market successes and failures have affected Dubai’s property market both positively and negatively. Dubai property transaction dipped to about 14% below what 2017 brought in. This is attributed to the volatility in almost every key market with the United States being the major exception. However, this might be attributed to a good number of non-resident Indians investing in the Indian property market, the US Dollar’s strength, and other markets strength attracting foreign capital like the UK and South East Asia. Also, the price of oil is indeed a factor for lesser dealings as GCC nationals were more strapped for cash in 2018. Also, the price of oil is indeed a factor for lesser dealings as GCC nationals were more strapped for cash in 2018.

Emaar Properties reported a 30 per cent jump in net profit at Dh7.216 billion in 2018 as revenue surged 37 per cent to Dh25.694 billion.

The developer said  during the fourth quarter 2018, it revenue   jumped 53 per cent to Dh8.304 billion compared to the same 2017 quarter revenue. Net profit in the final quarter was Dh1.954 billion, up 34 per cent, prior to considering the effect of the IPO of Emaar Development and forex movement.

Emaar Development’s total revenue in 2018 urged 74 per cent to Dh15.433 billion. “Highlighting the strong investor interest for Emaar’s residential launches, Emaar reported total sales of Dh14.394 billion  in UAE during 2018. Emaar now has a sales backlog of Dh36.454 billion  in the UAE to be recognised as revenue in the next three to four years.

There has been a positive economic activity within the community regardless of the volatility in the oil market. With approximately 800 more dealings in comparison to 2017, land sales have experienced a slight upward trend for 2018. However, preparations for Expo 2020 are still in progress; augmented government expenditure from 2018 will be carried over into 2019 with a total budget of AED 56.8 billion, AED 9.2 billion of which is apportioned for infrastructure expenditures for Expo 2020.

Property Transaction Highlights For 2018

Looking at the full picture of the property transaction, the Dubai Land Department reports the following;

  • 34,942 property sales transactions in 2018
  • From 2017, the overall transaction decreased by 14%
  • Off-plan transaction volume dropped by 27.7% for 2018 as compared to 2017
  • 33,103 attributed to residential market considering both off-plan sales and secondary transfers for villas, apartments, and townhouses.
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The Topmost Transaction Areas In Dubai 2018:

  1. Mohammed bin Rashid city with 3,342 transactions, a 53% increase from 2017
  2. Business bay with 2,945 transactions, a 7% upturn from 2017
  3. International City with 2,560 transactions, a 77.9% rise from 2017
  4. Jumeirah Village Circle with 2,305 transactions, a 19.5% decrease from 2017
  5. Dubai Marina with 2,040 transactions, 19.8% decrease from 2017
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The overall transactional volume reduced by 14% for 2018 as compared to 2017. All the same, other goals such as the expansion of inexpensive housing developments, financial support from developers like post-payment and rent-to-own plans along with leading numbers of projects coming to fruition quickly have been attained.

2018 Demand and Supply Key Market Trend

By the end of 2018, many residential projects were accomplished with an additional 1,145 units completed in December. In the same month, Business Bay, Mohammed Bin Rashid City, and International City topped the transferred sales list.

There are numerous communities (for example, Arjan being the highest gross rental yield in Dubai offering 12.4%,International city with about 10.1% Gross Yield) in Dubai that outperform most global yields regardless of the overall declining property prices. Newly constructed residential supply for the month of December saw about 482 villas added to the communities of Nad Al Sheba. In addition, IMPZ and Dubailand added 128 and 482 buildings, respectively, to their ever-rising roster.

According to the calculations made during the research carried out by Property Finder, 14,707 residential units had a completion estimate of about 95% in the month of October this same year. Their total completion was expected by the end of the year 2018. Nevertheless, only over 2,792 of that figure have been completed, thereby, pushing the rest of the expected sully to be completed in 2019.

Secondary Market Transactions in 2017 and 2018

Unlike 2017 when the off-plan transaction was king in Dubai’s real estate market, secondary market sales took over supremacy in 2018. However, buyers weren’t fortunate enough to have attractive payment plans and much sales incentive which were rolled out by generous developers in 2017. This year, in terms of completed deals, secondary market transaction plan suppressed the off-plan market. Interestingly, 2018 experienced a huge demand and buzz. Many buyers waited for the handover so as to secure 75% of the money before purchase.

Top 5 Selling Apartment Offplan Projects In Dubai 2018

  1. Azizi Rivera
  2. Lawnz by Danube
  3. Dubai Creek Harbour
  4. Dubai Hills Estate
  5. Vera Residences
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Top 5 Selling Offplan Projects Townhouses/Villas In Dubai 2018:

  1. Amaranta
  2. Dubai Hills Estate
  3. Mudon
  4. Akoya Oxygen
  5. Serena
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In 2018, approximately 40,000 residential units were expected to be completed in Dubai. This might put pressure on sales and rent prices, especially the secondary market with a good number of units expected in 2018.

What can we expect as we look toward 2019?

According to Lynnette Abad Director, Research and Data Property Finder, 2019 will be an interesting year when it concerns the completion of projects and new supplies. Looking forward to 2019, the supply story will continue as we will see an unprecedented amount of residential supply coming in.

At the end of 2018,

Property Finder research found 33,982 residential units that were under construction in Dubai with a completion status of at least 65% and completion scheduled for 2019. 29,115 of those units are apartments and 4,867 units are villas/townhouses. Adding the 13,520 units that were to finish in 2018 and have been pushed for 2019 completion to the figure already slated for 2019, we can expect to see the completion of 47,502 units by the end of 2019. Although materialization is not always full, the rate has increased over the past year and that will also be true in 2019 as projects are urged to be completed for Expo 2020.

To top it off, UAE property prices continued to fall in 2018. This ongoing market correction came with a lot of challenges for UAE property and industry owners alike, but this, however, became a huge advantage for clients, who are now more than ever, spoilt with choices. 

With the touristic section booming year on year with 15.8 Million Visitors to Dubai in 2017-2018, making it the 6th Most Visited City In The World.

And these numbers are expected to increase year on year especially with the Expo 2020 right around the corner.

Below you will find an info-graphic made by Global Media Insight

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Would Love To Hear Your Thoughts About The 2019 Dubai Real Estate Market Predictions

All credits goes to Property Finder and the Market Trends report that can be downloaded here

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