Dubai’s real estate market softened further in Q3 2019 with sales prices and rents declining due to the supply glut and strong real estate pipeline, but transaction volumes increased with tenants choosing to upgrade to more spacious units and developers offering attractive payment options to turn tenants into owner-occupiers, according to Cavendish Maxwell’s Q3 2019 UAE Property Market report.
According to Property Monitor, the real estate data and insights product of Cavendish Maxwell, average apartment prices declined 16.5% during a 12-month period from Q3 2018 to Q3 2019, with International Media Production Zone (IMPZ) registering the steepest decline of nearly 25%; and communities including Downtown Burj Khalifa, Discovery Gardens, Jumeirah Lakes Towers (JLT), and International City witnessing 17% declines.
The report also stated that average villa and townhouse prices declined 15% between Q3 2018 and Q3 2019, with communities such as Cedre Villas - Dubai Silicon Oasis, Victory Heights, and Jumeirah Islands witnessing a 16% to 19% decline in sales prices.
In the rental sphere, Dubai villas and townhouses witnessed a 12% fall in rents over the 12-month period from Q3 2018 to Q3 2019, while apartment rents fell at an average of 15%, with communities in International City, Sports City, and JLT, weathering a 17% to 21% drop in apartment rents.
Dropping prices, attractive payment options, as well as the lowered settlement fees for early mortgages by the UAE Central Bank spurred real estate transactions, according to the Cavendish Maxwell report.
In Q3 2019, more than 5,820 apartments, and 1,080 villas and townhouses were handed over in Dubai.
Looking to the future, 60% of agents surveyed predicted continuing decline in residential prices and rents in the upcoming quarter, with apartments making up approximately 70% of the upcoming supply in 2019.
Materialisation rates are expected to match previous years at 40% to 50%, with handovers in Q4 2019 projected to average between 5,000 and 7,000 units, the report added.