Dubai Property Prices 2016
There is a lot of interest in Dubai Property Prices 2016. As you’ll probably be aware, 2015 was somewhat of a mixed year for property prices in the Emirate. Their was hope that the year would start well. Unfortunately they didn’t. The Dubai Government’s actions to cool down an overheating market in 2013 started to take hold in late 2014 and prices sank dramatically. In 2015 they continued to do so. The payment of the Property Registration Fee (click here for the Dubai Land Department or here for our piece on the Registration Fee) at the end of October 2015 probably didn’t help much as it concentrated owners’ and developers’ minds more on getting the payments through on time rather than actively accessing the market. Consequently there is some hope that 2016 may be a little better than 2015 which was, to be honest, quite forgettable.
Scroll down the page if you want to see more recent reports.
Dubai Property Prices – Q1 2016
The Khaleej Times reported on March 4th that the 2016 market is evolving better than had been anticipated in most mainstream media:
“Evolution of a mature property market driven by growing end-user segment is propping up Dubai’s real estate market, which is on track to register Dh300 billion transactions in 2016, contradicting bleak forecasts by some quarters.
“While reports from developers and analysts indicate Dubai’s real estate market is down, experts on the ground are confirming transactions are up and the state of the market is in line with expectations,” said property analysts Allsopp & Allsopp.
Transactions in the first two months of 2016 are up 18 per cent on the same period last year, and month-on-month growth over the last 12 months has increased by 12 per cent.”
Over at the Dubai Chronicle it is reported, rather similarly, in March 2016:
Data released by Dubai Land Department recently showed more than Dh68 billion of deals was struck in the first 53 days of 2016 while the department predicts a total Dh300 billion ($81.6 billion) of transactions over the course of the year. Land and commercial transactions still post the highest numbers.
There are two distinct property markets in Dubai – the investment market and the end-user market. While the investment market is constantly analysed and discussed, the end-user market is less popular topic despite that the current transactions are happening mostly within the end-user residential market.
In an interesting point further on in the article it states:
Geopolitical risk is also a very significant reason for the property prices decline. People on-the-move and international investors don’t perceive the region as safe enough to place their assets.
A review by KPMG early in 2016 claims that it is going to be a ‘challenging year’ but that a pickup may be expected in 2017.
KPMG’s review of Dubai’s property market predicted that while 2016 may be a “challenging year” due to a number of internal and external factors, the market should see an upturn next year.
While certain areas of Dubai have been more impacted than others in terms of declining prices, the overall magnitude of the decline has been tempered.
A Better Homes report at the end of quarter one 2016 found the following change in prices since the end of 2015:
At time of writing the start of this article Dubai Property Prices 2016 are only one quarter complete. The outlook hasn’t been overly optimistic, but the above features would give encouragement to sellers that there is a market, albeit at lower price levels.
Dubai Property Prices – Q3 2016
Average residential sales rates for completed properties were broadly stable, recording no change compared with the previous quarter, despite a significant slowdown in the number of transactions, down by 22% compared with Q2 2016 (Reidin). Rates appeared to have stagnated in the last few months at levels similar to the pre-Expo 2020 announcement. However, with many off-plan property launches at competitive rates, Developers could potentially face some pressure in the near future. A significant increase in activity in the area closest to the new airport was recorded in the last few months, such as the launch of Emaar’s Urbana at Emaar South and various projects in Dubai South.
Most of these recent releases had significantly lower asking prices compared with the current market pricing as Developers are expanding into the affordable segment, by reducing unit sizes and launching projects in secondary locations. These low prices in Dubai South could only be applicable for initial launches to increase take-up and create momentum for the area as it is the closest to the Dubai Expo site and the new airport, which will in time generate a significant amount of employment.
Apartment rental rates remained stable this quarter, with some variations depending on localities, whereas villa rental rates were down by 1%, on average, over the quarter as a large amount of newly delivered stock was vacant and competing to find Tenants.
Apartment prices remained broadly stable over the quarter; with Buyer’s preference continuing to be for smaller units in more affordable communities. We expect transaction levels to increase over the next few months as the general perception indicates the market is bottoming out.
After dropping nearly 20% year-on-year, rates in Dubai Marina remained stable and similarly DIFC, Greens, and JBR were stable this quarter.
With ample options available in the market, at various prices and attractive payment plans, buyers have significant choice. They also appeared to be better informed compared to previous years, as they researched their options, pricing, payment plans, and developer’s track record.
Off-plan products launched by the Master Developers achieved a strong take-up due to attractive sales prices and payment plans.
Apartment rental rates remained stable this quarter, with some variations depending on localities, whereas villa rental rates were down by 1%, on average, over the quarter as a large amount of newly delivered stock was vacant and competing to find Tenants. See our full post on Dubai Rental Rates 2016.
This most recent report is courtesy of Asteco, you can download the full report at http://bit.ly/2gwai8m.
Dubai’s price in 2015 was remarkably weak, in late 2014 and into mid-2015 Dubai was the world’s worst performing residential property market recording losses of around 15.5% in the residential market to the end of Q2.
Quite a few local commentators in Dubai expected residential price declines to continue through 2016 until the end of 2017, due to market and geopolitical risks. Liquidity constraints, essentially a lack of bank lending, are also weighing on the market. There is also the spectre of the strong US dollar – to which the United Arab Emirates dirham is pegged. Added to this are ongoing problems with low oil prices, which obviously affects the region.
The strong dollar has also resulted in quite a few ex-pat owners looking to sell units, which is adding to market supply. There is some on the ground anecdotal evidence of more distressed sales along with these deals motivated by exchange rate movements.
The reality, so far, has been rather more stable than predicted, which would give hope for better achievable prices in 2017.
As more information relating to Dubai Property Prices 2016 becomes available we’ll be updating this post so bookmark the page and check back occasionally to see what is going on in the Dubai Property Market in 2016.