More off-plan sales, lower priced inventory, efficient unit sizes and yield compression are key trends
Dubai witnessed an upsurge in both ready and off-plan sales this year, with overall property transactions until September totalling to more than 50,000, according to the Dubai Land Department (DLD). Heightened off-plan sales, lower priced inventory, efficient unit sizes and yield compression are the key factors that summarise the 2017 Dubai real estate market.
Off-plan sales continued to drive residential market activity in the third quarter, accounting for 74 per cent of the total number of transfers (6,350 in total). Until date, off-plan sales have amounted to 68 per cent of the total transactions in 2017, of which over 80 per cent were apartment sales. Thus far in Q4 (October 1 to November 15), off-plan transactions in apartments and villas/townhouses stand at 2,515 and 235 respectively, with Serena, Mohammed bin Rashid City (MBR), Al Furjan and Dubai Healthcare City being the top four destinations where these transactions occurred. The current momentum in sales activity is driven by a larger proportion of end-users than before, particularly first-time buyers.
Lower priced inventory
In 2017, residential property transaction prices have traded within a close range of Dh1.25 million to Dh1.5 million for apartments and Dh1.7 million to Dh2.1 million for villas/townhouses on average. Most of the off-plan sales in October had occurred for studios, one-bedroom and two-bedroom apartments, with the prices for these averaging at Dh600,000, Dh940,000 and Dh1.6million, respectively. In areas like Al Quoz, Dubai South and Downtown Jebel Ali, studios are being traded at a price less than Dh500,000 and in International City, the cost of a two-bedroom apartment is Dh719,000, both below the market average.
Lower priced inventory continues to enter the market in locations such as Dubailand and Arabian Ranches 2 for villas/townhouses and Dubai South, Jumeirah Village Circle and Al Furjan for apartments, thus impacting price dynamics for existing developments.