Dubai: Most property buyers seem to have taken a timeout in January, with Dubai’s off-plan sales down 28 per cent in volumes and 40 per cent in value terms from a year ago. Some sort of drop-off was anticipated after an exceptionally strong 2017 for off-plan demand, but the January 2018 numbers seems to have come in much lower than expectations.

In fact, Dubai’s developers kept well away from off-plan launches during January, with only three — Emaar, Damac and a private entity L-I-V, which opened sales for its first freehold tower — willing to do so.

In Emaar’s case, it managed to pull in sales confirmations of Dh1 billion or so within days for the towers it launched at a brand-new development, the Beachfront.

Based on available estimates, just about 800 units were released in the first 30 days of the year, according to GCP-Reidin, the real estate consultancy. In all, January 2018 saw 1,645 off-plan deals being registered, as against the 2,281 units 12 months ago. In all, off-plan sales of over 2,000 units each were recorded in five months and of 1,800 units plus apiece in a further three months of 2017.

And market sources say off-plan sales could remain subdued in the weeks ahead if the majority of developers continue to play safe with launches.

Just as important, what could weak demand mean for developers with unsold stock from their recent launches? “It is very difficult to estimate unsold stock — some have expressed concern about these levels rising,” said Sameer Lakhani, Managing Director at Global Capital Partners. “However, the data available is opaque for this.

“Or less demand for off-plan now could mean investors are channelling money back into ready properties. Remember that there is always a rotation between off-plan and ready units in terms of money flows. We may be seeing the beginning of a rotation back towards the ready space, though it is too early to tell.”

In a recent interview, Rizwan Sajan, Chairman of Danube Properties said that developers will always wait for the market to settle down when a new factor — such as VAT — is introduced. “Only when things are clear will the off-plan launches pick up pace again,” said Sajan. “As for unsold stock, any developer who has managed to sell 70 per cent or more of his stock is sitting pretty.”

In January, locations such as Nshama’s Town Square project did well, with sales up 29 per cent from a year ago, as did Dubai South (up 119 per cent) and MBR City and Jumeirah Village Circle, the GCP-Reidin report adds.

Even at Dubai Marina, there was an 11 per cent increase in transactions but only 1 per cent up in value, which could suggest a buyer preference for smaller units. MBR City and Dubai Creek Harbour were the top location picks last month.

After a relatively healthy gain in the fourth quarter of 2017, Dubai’s sales of ready properties took a bit of a hit in January, down 24 per cent in volume and 26 per cent on value from January 2017. The final January tally for ready properties was 867 units against the 1,138 deals a year ago.

“What we have seen is that there has been an allocation towards the off-plan market in the 2015-17 period,” said Lakhani. “During this time, primary prices have risen at the expense of the ready market. At some point, rotation of money flows may well move in the opposite direction, and in certain communities we are starting to see that happening.”