Busier residential market in fourth quarter, with Dubai Marina recording the most transactions – Chestertons
There was a 30% increase in Dubai residential real estate transactions in the fourth quarter of 2016 compared to Q3, according to property agent Chestertons MENA.
According to the Q4 2016 Dubai Residential and Office report, Dubai Marina was the most active area, although property prices edged down slightly across the market as a whole.
The increase in transactions “is a possible indication that the gap between what a seller expects to achieve and the amount that a buyer is actually willing to pay is closing still further,” said Robin Teh, Country Manager for the UAE at Chestertons MENA.
“The average drop in sales prices in areas such as Dubai Marina, Emirates Living and JLT have made these locations more attractive to potential homeowners who may have previously been tenants. While International City remains an attractive area for investors, Dubai Sports City provides affordable units which have grown in demand over the last couple of years.”
Dubai Marina, International City, Dubai Sports City, Emirates Living and Jumeirah Lake Towers were the top five locations in total transaction values and volumes in Q4 2016.
Dubai Marina occupies the number one spot with 416 transactions worth AED 724 million in Q4 and AED 2.9 billion in total throughout 2016.
Teh said: “Residential cash sale transactions were approximately AED 18 billion in 2016, although this was an overall drop of 25% from 2015. Records show an increase in mortgaged purchases, which points towards more owner/occupiers buying property in Dubai.”
Apartment sales prices in the emirate in Q4 2016 fell marginally across the board by 1% on average, while year-on-year there was an average decline of up to 3%. The worst performing area was Dubailand, where the average sale price for apartments fell by as much as 4% in Q4 compared to the previous quarter, and 9% overall for the year. Average apartment prices in JVC and Remran saw no change over the quarter and a minimal 1% drop throughout the year.
Villa sales prices decreased by an average of 2% in Q4 2016 and 6% overall for the year. Villas in Al Furjan saw a marginal drop from the previous quarter, but recorded a marked 9% fall in prices through 2016; while prices in Jumeirah Park declined by 5% from Q3 and 7% year-on-year.
The price of villas in The Lakes and Arabian Ranches fell 2% over the quarter and 6% overall for the year. Only villas on Palm Jumeirah showed any signs of price increase (1%) from Q3 to Q4, while remaining stable for the year.
“Real estate prices dropped at a slower rate during 2016 as the ripple effect of global and economic uncertainty continued to impact the market in Dubai. We expect this to continue into the first half of 2017 and prices to remain flat,” said Teh.
Approximately 3,000 residential units entered the market in Q4 2016, bringing the estimated total residential supply in Dubai to 472,000.
On average, there was a 2% drop in apartment rents Q4 2016 across all areas and a 3% decline year-on-year.