Residential transactions in Dubai’s property market dropped both in volumes and values in the third quarter of this year, according to a new report by Chestertons.
While values fell by 29 per cent quarter-on-quarter, total residential transaction volumes decreased by 24 per cent in Q3 2016, the report said.
There were Dhs3.45bn worth of residential sales transactions last quarter, with Dubai Marina the most popular area of the emirate with sales worth Dhs654m.
Robin Teh, country manager – UAE and Valuations and Advisory director, MENA, said: “Dubai Marina will always be an attractive location for investors with consistently high levels of yields.
“The highest transaction values remained in the prime areas such as Emirates Living, Palm Jumeirah and Downtown Dubai. However, as investors bide their time on the bottoming of the Dubai market, total transaction volume and values dropped in the last quarter, compounded by the traditional lull in activity due to the summer and holiday season.”
Sales prices in both villa and apartment sectors also fell by around 1 per cent during the last quarter, with apartments in Business Bay (Dhs1,350 per sqft), Discovery Gardens (Dhs850 per sqft), International City (Dhs695 per sqft) and The Views (Dhs1,470 per sqft) seeing the biggest drop.
Prices in Dubai Motor City, JLT and Remraam remained unchanged.
Meanwhile high-end properties on the Palm (over Dhs2,200 per sqft) were the only villas that retained their value.
Teh said: “We expect prices to remain at stable levels leading up to the end of 2016.”
In terms of rents, rates fell marginally by 1 per cent in both apartments and villas across all unit types.
Average one bedroom apartments in Remraam fell to Dhs57,000 per annum.
However, two bedroom apartments in select locations saw drops of up to 2 per cent such as Downtown Dubai, JLT and the Greens, the report said.
Average rents for three bedroom apartments in DIFC, Downtown Dubai and Dubai Marina remained the same in all cases.
In terms of villas, Arabian Ranches saw the greatest drop, with an average four-bedroom now renting at Dhs245,000 per annum. Villas on the Palm, JVT and The Springs remained consistent quarter on quarter.
Teh added: “Demand remains relatively stable, with tenants having more negotiating power in the current market. Job losses and lower spending capacity have placed pressure on rates in Q2 and Q3 2016.”