Figures are derived from a basket of properties and therefore represent a snapshot of each location Image Credit: Asteco

When is the right time to buy property? In a property market cycle, the “trough stage” is generally the phase that is most conducive for buyers looking for steep discounts. It is the stage characterised by languid investor interest and declining prices — a buyer’s market.

According to research by Asteco, third-quarter rents in some popular locations in Dubai have dipped by double digits year-on-year — 23 per cent for studios in Discovery Gardens and 18 per cent for two-bedroom villas in Arabian Ranches. “There’s no doubt that 2018 has seen the UAE real estate market enter into a mature phase, no longer characterised by the frantic buying and selling that has been its hallmark for many years,” said Elaine Jones, chairman and founder of Asteco.

During the first nine months of the year, the number of investors in Dubai real estate dropped by 30 per cent compared with the same period last year, according to ValuStrat. The value of investments also went down 40 per cent to Dh50 billion. “These statistics seem to suggest that the Dubai residential market is on the cusp of the ‘trough stage’, where buyers could get the upper hand in price negotiation,” said Haider Tuaima, head of real estate research at ValuStrat.

However, despite the signals in the market, many buyers typically wait for prices to further fall, which may not be a sound strategy. “[If they continue to wait it out], it might just be too late,” said Tuaima, explaining how the choicest properties could become quickly unavailable as the market enters the initial stages of recovery. He said homebuyers and investors must be vigilant to pick up signs of the market transitioning into the next phase.

“Our data analysis has shown that the average ticket size for recently sold homes in Dubai is on the rise, suggesting that an increasing number of investors are opting for well-located, high-end property in anticipation for medium-term capital appreciation,” said Tuaima.

Dima Isshak, manager of strategic advisory at CBRE Middle East, also noted a 9 per cent year-on-year increase in secondary market transaction volumes, “suggesting investors perceive real value in the residential market”.

Isshak pointed to Dubailand as the most popular location for future supply, accounting for up to 24 per cent new deliveries in the next couple of years, followed by Dubai Creek Harbour (14 per cent) and Mohammad Bin Rashid City (12 per cent).

While there are currently plenty of buyer-friendly deals, property experts agree that the next 12 months will be a critical phase for the real estate sector — one that they hope will usher in opportunities for both sides of the market.

“Moving into 2019, we anticipate stability in the UAE market and the region generally, which will result in an increase in demand and activity leading up to Expo 2020 Dubai,” said Jones.