Dubai’s residential property market recorded a drop in sales prices during the first quarter of 2015, with focus now shifting to the affordable segment, real estate consultant Asteco said in its Q1 report.
Apartment prices were down three per cent while villas registered a two per cent decline in sales prices in the first quarter of 2015, the report stated.
According to Reidin data, transaction volumes for completed apartment properties also fell by 12 per cent in Q1 2015, with completed villas falling by 35 per cent compared with Q1 2014.
The decline in villa transactions was not unexpected due to “the quantum of new supply, with stabilisation of prices in popular developments such as Arabian Ranches and Dubai Sports City, and a nine per cent quarter-on-quarter drop in sales prices registered at The Meadows and Springs communities,” the report stated.
Al Furjan, Jumeirah Park and Palm Jumeirah also saw prices decline in Q1 2015.
However the first three months of the year saw renewed focus on Dubai’s pent-up demand for affordable housing.
“Value-for-money has become more important than property prestige, and with a noticeable decline in buyers from Russia and the CIS countries, due to the worsening economic situation, this is prompting new opportunities, and we are seeing more GCC investor interest in reasonably priced properties, led by Saudi Arabia and the UAE, including off-plan projects specifically designed for investors,” said John Stevens, MD, Asteco.
“There have been a number of launches in recent months that have proven extremely popular in terms of take-up,” he said.
Nshama launched over 1,000 three and four-bedroom townhouses at Zahra and Hayat in its new Town Square development, with a three-bedroom available from Dhs1 million.
The Dubai Municipality has also allocated over 100 hectares of land in Muhaisnah 4 and Al Quoz 3 and 4 to developers to build affordable housing for rent for those earning between Dhs3,000 and Dhs10,000 per month.
In terms of rents, rates, on average, remained unchanged in Q1 2015, however, certain adjustments were witnessed across select areas, with less desirable properties lowering their asking rates to attract tenants, Asteco said.
Some increases were witnessed in newer communities, such as Jumeirah Village and Dubai Sports City, with high-end apartments in Dubai Marina and Downtown Dubai also attracting strong demand.
Villa rental rates were down by two per cent, on average, due to low demand for more expensive properties and properties located further afield from the city.
“For villa rentals, the limited supply of stock in the ever-popular Jumeirah/Umm Suqeim area was good news for Al Barsha, and we saw increased interest here, driven also by location accessibility to schools and the city’s major attractions,” said Stevens.