Stay informed about what’s happening within the Dubai housing market with our expert analysis
Your journey to property ownership begins with taking a good hard look at the facts. In 2019, prices were down and transactions were up – especially in the affordable sector (properties valued at AED1.5 million and under).
According to the latest Cavendish Maxwell 2019 UAE Property Market Report, prices of villas/townhouses in Dubai fell by 15.7% on average over a 12 month period (Q3 2019 versus Q3 2018).
A total of 10,682 Dubai Land Department (DLD) transactions took place in Q3 2019, with the total volume of secondary transactions up 2.7% compared to the same period the previous year. This was greatly outpaced by off-plan market transfers, however, which were up by 66%.
“Sales transactions in 2019 surpassed those of 2018 in mid-October, with November showing the highest monthly sales since 2008,” adds Richard Waind, group managing director of Betterhomes.
For those buying through the company, Arabian Ranches, Jumeirah Park, Dubailand, The Springs and Akoya (Damac Hills) are proving to be the most popular places to buy a villa whereas Dubai Marina, Jumeirah Lake Towers, Jumeirah Village Circle, Jumeirah Beach Residence and Downtown Dubai are the preferred places to bag an apartment.
“Prices continued to soften in 2019 on the back of increased supply, however, we are now seeing the rate at which prices are falling is slowing,” says Waind. Signs that the market may be bottoming out follows the announcement in September 2019 of a real estate planning committee being formed in the emirate. It is specifically aimed at achieving a balance between demand and supply by ensuring that a duplication of projects is avoided and that all projects add value to the economy.
DLD has long championed the role of the real estate market in strengthening Dubai’s position as a global economic capital that gives major cities around the world a run for their money. Indeed, Dubai’s real estate sector contributed significantly to GDP growth in 2019, giving 13.6% compared to 6.9% the previous year.
“Information, clarity and transparency are vital for a vibrant market, and it’s great to see that the market is becoming more transparent – it is very welcome by all stakeholders,” says Waind. “We believe that we are now seeing the bottom of the market in terms of prices, although with lots of new project handovers set for early 2020, some pressure will continue. The rate of price falls has decreased substantially to 1% in Q3 2019, according to Jones Lang LaSalle (JLL), and with transaction numbers increasing, 2020 looks set to be a good year for real estate.
He summarises: “There are some great bargains out there for buyers today, but with increased interest from both those based locally and internationally, the window of opportunity to take advantage of the current market may be shorter than you think.”
“Sales transactions in 2019 surpassed those of 2018 in mid-October, with November showing the highest monthly sales since 2008,” says Richard Waind, group managing director of Betterhomes
The Expo effect
Mega event Expo 2020 is expected to have a positive knock-on effect on Dubai’s real estate sector. With an aim to attract 25 million visitors, the majority from overseas, the expo is putting the emirate on the international stage. “As well as shining a light on investment opportunities, it’s thought the event will attract a new wave of people who want to move to Dubai. In turn, this could give the market a significant boost,” says Waind.
Who’s buying right now?
Emirati nationals rank first in terms of the value of real estate investments, according to DLD, making investments worth over AED10 billion. Indian investors came in second place, with investments worth over AED8 billion in 2018.
Investors versus end users
Betterhomes is seeing a split of 32% of end users and 68% of investors buying properties in Dubai. Around 35% of buyers took out a mortgage whereas 65% paid cash. At the company, overall sales transactions were up by 15% in Q3 2019, compared to the previous year.
What’s under construction?
According to DLD, Jan-May 2019 saw the launch of 48 new real estate projects (“far lower than previous years,” says Waind) which, upon completion, are expected to bring around 8,000 new residential units to market.
Find out more about buying a house in Dubai here.