Now Reading
Off-plan property deals in Dubai rise, sales of completed units drop in Q3

Off-plan property deals in Dubai rise, sales of completed units drop in Q3

The most transacted area for off-plan properties was Dubai South with a total of 1,151 deals

The volumes and values of off-plan property transactions in Dubai rose in the third quarter of the year, a report by Chestertons MENA has found.

While the number of transaction increased by 86 per cent from the previous quarter, the value of the deals was up by 118 per cent to Dhs4.04bn.

The most transacted area was Dubai South with a total of 1,151 transactions, followed by Downtown Dubai with 821 transactions and Business Bay with 686.

In terms of values, Downtown accounted for 50 per cent of the overall amount with sales valued at over Dhs2bn.

“With reference to off-plan transactions, Dubai’s real estate market has witnessed seasonal peaks and troughs in the last year due to high levels of uncertainty,” said Ivana Gazivoda Vucinic, head of Advisory and Research, Chestertons MENA.

“After a promising start to 2017, sales plummeted during a disappointing Q2 however they have picked up positive momentum in Q3.”

The report added: “This could potentially trigger further declines in completed unit values, as investors shift more and more towards off-plan property opportunities offering convenient payment options such as five-year post-handover or 1 per cent payment per month.

Increased interest in off-plan units had a continued negative impact on completed units in Q3, the report stated..

Transactions for completed units witnessed a 11 per cent drop in volumes and a 19 per cent decline in values during the quarter.

“A slight pickup of completed unit transactions is expected in Q4. This will however have a negative impact on off-plan sales transactions which we expect to decline and then stabilise,” said Vucinic.

Apartment sales prices declined by 2 per cent during the third quarter of 2017.

But prices varied between areas – rates at Dubai Silicon Oasis fell by 9 per cent to Dhs829 per sqft while rates at The Greens grew 13 per cent to Dhs1,352 per sqft.

Dubai Marina was the only other location to witness an increase of 2 per cent, with average sales prices in the area now at Dhs1,470 per sqft.

Villa sales prices were “more resilient due to the higher level of corrections during the previous quarters”, the report said.

The Meadows and Springs were the worst affected areas, both recording a 7 per cent decline.

Meanwhile prices in Arabian Ranches fell by 3 per cent to Dhs1,010 per sqft and rates stand at around Dhs2,534 per sqft at Palm Jumeirah; Dhs1,136 per sqft at Jumeirah Park; Dhs1,348 per sqft at The Lakes; Dhs1,039 per sqft at The Meadows and Springs; and Dhs1,105 per sqft at Victory Heights.

In terms of rents, apartment rates fell further in the third quarter after additional stock entered the market.

While rents fell by 3 per cent on average, Discovery Gardens, Dubai Marina and Jumeirah Village Circle, on average, witnessed declines of 5 per cent. Only rates at The Greens remained on par with the previous quarter.

“We have seen a 2 per cent decline for studios and a 3 per cent decline for one, two, three-bedroom apartment units,” said Vucinic.

“Studios have been relatively resilient this year and performed better throughout the year when compared to larger apartments and the same is true of the villa market. Two and three-bedroom villas are performing better than larger configurations.”

In the villa rental market, three-bedroom units witnessed a 4 per cent increase during Q3, while other sized units declined by 2 per cent (two bedrooms), 3 per cent (four bedrooms), and 1 per cent (five bedrooms).

“To stimulate demand, we are increasingly seeing landlords now offering more favourable rental plans, including up to 12 cheques and even rent-free periods as an incentive to lease properties,” added Vucinic.

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top