Chestertons: Transaction values hit $1.1bn, with Dubai South, Downtown Dubai and Business Bay most popular areas
The value of off-plan property transactions in Dubai in the third quarter of the year jumped by 118% to AED4.04 billion ($1.1bn), a report by Chestertons MENA has found
The total number of off-plan transactions during the period increased by 86% from the previous quarter, it noted.
“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. After a promising start to 2017, sales plummeted during a disappointing Q2 however they have picked up positive momentum in Q3,” said Ivana Gazivoda Vucinic, Head of Advisory and Research, Chestertons MENA.
The most transacted area in Dubai was Dubai South with a total of 1,151 transactions, closely followed by Downtown Dubai with 821 transactions and Business Bay with 686.
The increased interest in off-plan units had a continued negative impact on completed units, where an 11% decrease in transaction volumes and a 19% in values was witnessed.
“In Q4 we expect to see further corrections of sales prices and rents. A slight pickup of completed unit transactions is expected, this will however have a negative impact on off-plan sales transactions which we expect to decline and then stabilise,” said Vucinic.
Overall, apartment sales prices have continued to decline during the third quarter of 2017 witnessing a drop of 2%, thus prolonging the downward trend witnessed during the summer. 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% payment per month, Chestertons said.
Prices varied significantly from community to community within the apartment market with Dubai Silicon Oasis declining 9% to AED829 per sqft whereas The Greens actually witnessed growth of 13% to AED1,352 per sqft, by far the best performing area in Q3. Dubai Marina was the only other location to witness an increase of 2%, average sales prices in the area are now AED1,470 per sqft.
Apartment rental values fell further in the third quarter after additional stock entered the market leading to a 3% decline. Discovery Gardens, Dubai Marina and Jumeirah Village Circle, on average, witnessed declines of 5%. In was only The Greens that once again remained on par with the previous quarter.