Even 13,000 new homes going on sale in Dubai during the first six months do not seem to have much of an impact on property values. In fact, there seems to be a major disconnect building up between what is turning out to be ample supply and prices.
And, not surprisingly, there are sharp variations depending on the location. There were only 360 apartments released at Dubai Marina in the first 8 of 2017, principally from the Vida Residences project.
But property values across Dubai Marina are down 3.7 per cent in the year to date, according to data from Reidin-GCP.
The average price of transaction as of June at the Marina was Dh1,474 a square foot.
“But there were 1,457 units launched in Business Bay and yet prices there have remained flat at Dh1,400 psf,” said Sameer Lakhani, Managing Director at the consultancy Global Capital Partners.
And in JVC (Jumeirah Village Circle) there were just 647 units launched and yet prices inched up by 2.1 per cent, to Dh914 psf.
While these are all small movements, there appears to be latent demand that developers are tapping into at certain communities. This is obviously boosted by the fact that the more recent launches are accompanied by an ever increasing package of post-handover payment plans.
“Obviously, there could come a situation of oversupply in a particular community if the pace of launches continue. But developers too are become increasingly savvy in gauging the demand that is inherent in every community.”
One of the best performing freehold residential clusters in the city, Dubai South, is starting to develop a fairly active secondary market.
Even as 864 new units were released as off-plan in the first six months, the location is still seeing quite a bit of buying and selling on already acquired units.
“Prices have been at or around Dh800 per square foot as against the Dh700-Dh750 psf last year,” states the Reidin-GCP report.
”We have seen a clear increase in values as developers spruce up their offerings.”