Dubai: The mini-communities in Dubailand should see the maximum number of home handovers this year — more than 7,000 units — and with a majority of them in the mid-tier pricing range, according to a new UAE realty update from Cavendish Maxwell. The consultancy reckons it will be followed by Business Bay and Dubai Sports City, both accounting for more than 4,000 units apiece. Dubailand was the leader last year, too, accounting for between 2,800-3,200 units. In all, if developers were to stick to their schedules, a massive 61,000 homes are scheduled for completion this year, although the actuals would be much lower than that. (Of these, 13,000 units were from projects delayed being completed in 2016.) Last year, in Cavendish Maxwell’s estimates, 16,000 units were handed over, slightly higher than the 14,000 plus JLL reckoned was the case.
“Nearly 84 per cent of the total number of units completed in Q4-16 were apartments, with the majority of them located in Silicon Oasis and Dubailand,” states the Cavendish Maxwell report. And, “58 per cent of the units delivered in Q4-16 were projects delayed from the first three quarters of 2016.” (Residential property prices in Dubai declined by over 15 per cent since the highs last recorded in Q2-14.) The sense of optimism permeating the property market in the final weeks of 2016 will need sustenance. Dubai’s estate agents seem to suggest they are seeing enough to hope 2017 can see the momentum being sustained.
According to the survey, 63 per cent of estate agents polled by Cavendish Maxwell believe the property market is going to see an increase in potential enquiries this year, while 55 per cent insist they could see a sale as well.
In terms of where they see prices headed this year, 16 per cent believe it could rise by more than 5 per cent while 52 per cent suggest values would remained unchanged from end-2016 levels.
But for things to pan out in the way they — and the rest of the market — hope, other factors need to play along. That would mean the economy and the job situation seeing marked improvements.
“Residential demand is primarily driven by job growth for expats and redundancies in the high income jobs have kept net job growth at low levels,” said Sofia Underabi, Head of Residential Valuation. “In comparison, residential supply continues to expand, albeit at slower rates than pre-2009 and 2013-14 levels.
“A turnaround will be largely dependent on oil prices and US dollar movement.”
Even in Abu Dhabi, where the property market faced the brunt of the hits the oil-related economy received, the second-half of 2016 saw a slowing down in the rate of decline. “The residential market is expected to remain under pressure from redundancies in the oil and gas sector as well as those likely to result from the mergers of NBAD-FGB and Mubadala-IPIC,” says the report.
“Average apartment prices in Abu Dhabi investment zones have declined nearly 7 per cent since the highs in Q2-14, and weakened investor demand as a result of global economic trends, uncertainty over policies under the new US President and oil price slump will also impact residential market in the emirate.”
Recent value gains come amid lower transactions in 2016
According to official data, transaction volumes in Dubai declined nearly 19 per cent in comparison to 2015. But building transactions for November 2016 were higher than those during all other months of 2016 and 2015, suggesting the possible return of investors in sizeable enough numbers.
• In the year to mid-December, there were about 2,361 transactions for completed buildings, with more than 300 transactions in Dubai Marina and International City.
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