Homebuyers continue to wield the upper hand as the region’s biggest real estate showcase, Cityscape Global, rolls into town. Residential price trends in the third quarter have again favoured consumers with sales prices down 4 per cent and rents for villas and apartments retreating by 3 per cent and 2 per cent respectively, according to research by property consultant Asteco.
“There was a lower number of transactions and listings, mainly due to several reasons, including people going on holidays,” said Imran Hussain, director and head of residential valuations at Colliers International Middle East and North Africa (Mena). “Majority have already relocated in the second quarter of 2018 and existing owners successfully renegotiated their contracts downwards, which does not appear as a new listing and is not publicly available.”
Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations of Chestertons Mena, points out though that the secondary market has been more resilient in terms of transactional values and volumes compared with off-plan. “The slowdown in [off-plan] transactional activity is, in part, directly linked to reduction in the number of recent launches,” she said.
While rents are down, Ali Siddiqui, research analyst at Reidin, says the market is expected to pick up “as the emirate prepares to receive an inflow of visitors in the run-up to the World Expo 2020”.
There are certain areas, though, that have been affected more than others. In the apartment segment, Siddiqui said areas such as Jumeirah Lakes Towers, Discovery Gardens and Dubai Marina had the highest sales price decline on a quarterly basis, while Downtown Dubai and Jumeirah Village Circle had the lowest.
In the villa segment, Palm Jumeirah and The Lakes had the highest drop in sales prices, while Arabian Ranches had the lowest quarterly decline. In terms of transaction, Mohammad Bin Rashid City, Dubailand and Business Bay are seeing the biggest gains so far this year.
The number of launches at Cityscape Global is expected to be minimal in this year as only 12,000 new units have been launched during the first nine months, against the 25,000 units launched during the same period last year, according to Reidin.
“Even though the off-plan transactions have declined this year, the off-plan segment can be seen holding up strongly due to the financial mechanisms by developers to keep the segment attractive,” said Siddiqui.
Moving forward, Colliers expects market activity and sentiment to improve in the fourth quarter.
“It is actually the most interesting quarter as accurate estimates of the market performance would be revealed, which is mainly dependent on whether people actually travelled for the holidays or relocated,” said Mansoor Ahmed, director and head of healthcare, education, development solutions and PPP at Colliers.