There has been an increase in the number of end-users, first-time buyers in particular, entering the market encouraged by lower prices.
The Dubai property market has shifted from being mainly investor-led to a more mature end-user dominated market. A strong US dollar and weak oil prices are making Dubai property more expensive to investors from traditional source markets such as Russia, the UK and China.
Consider this. In July 2014, a dollar cost you 37 Russian rouble. In 2017, the same dollar costs 57 Russian rouble. In July 2014, a dollar would cost you 0.58 British pounds. In 2017, the same dollar costs 0.77 British pounds. In July 2014, a barrel of oil cost $115. In 2017, a barrel of oil costs $47.
“Russians were dominant investors of Dubai real estate prior to mid 2014 and are now virtually non-existent. UK investors were always active in the Dubai real estate market but since Brexit have been either dormant or have repatriated funds to the UK. Our oil-rich neighbours are currently taking stock while prices are low and are reluctant to invest in real estate to the same level as before,” says Lukman Hajje, chief commercial officer, Propertyfinder Group.
Downtown, Jumeirah Village Triangle, Jumeirah Beach Residence and Culture Village have seen the biggest price declines for apartments. On the contrary, apartments in Jumeirah Village Circle (JVC), Dubai Sports City, Business Bay, Al Furjan and International City witnessed price increases.
International City at Dh718 per square foot still offers Dubai’s most affordable apartments; at Dh2,182 per square foot, Downtown is Dubai’s most expensive apartment community.
The Expo effect is likely a consideration for some recent buyers on the southwestern side of Dubai, particularly those investing in off-plan launches near the Expo site, says ValuStrat’s Tuaima. “More generally, some parties feel we need to be a little closer to 2020 before a positive impact is felt in the wider real estate market,” he concludes.