Dubai property prices see first quarterly rise for 2 years
By Staff writer arabianbusiness
Saturday, 3 September 2016 12:42 AM
Dubai’s residential real estate market saw a price increase of one percent in the second quarter of 2016, the first quarterly rise for two years, according to Core Savills.
The Dubai Residential Market Update Summer 2016 revealed transaction volumes in Q2 saw a “significant” 5 percent rise from Q1, although they were still 15 percent behind Q2 2015 figures.
The report also showed that only 35 percent of projected stock is expected to come to the market in 2016, with the estimate of new supply for the remainder of the year standing at around 5,500 units.
In the sales market, prices in The Springs and The Meadows rose by 3 percent quarter-on-quarter but were down 7 percent year-on-year, making it the best performing villa district in Dubai.
Prime residential submarkets, Emirates Hills and Palm Jumeirah, meanwhile, remained “steady” along with Jumeirah Park, Arabian Ranches, Green Community and Dubailand, which stayed flat throughout Q2 and mid-Q3.
Jumeirah Village saw a drastic 5 percent quarter-on-quarter and 17 percent year-on-year drop, positioning it as the weakest performing villa district in Dubai.
In the apartment submarkets, Discovery Gardens was the only district to see a sales price rise by 4 percent quarter-on-quarter while prime apartment districts at DIFC and Palm Jumeirah experienced a 2 percent quarter-on-quarter drop in sales prices.
In the rental market, Jumeirah Park, The Lakes, The Springs and The Meadows, Arabian Ranches, Green Community and Jumeirah Village all demonstrated flat rents. Prime submarkets such as Emirates Hills and Palm Jumeirah saw a 2 percent quarterly drop in rents and Al Barari witnessed a drop of 4 percent over the quarter. Rents in Dubailand and Discovery Gardens fell by 3 percent and 2 percent respectively.
CEO David Godchaux said: “A decisive revival in the overall market is too soon to predict as we expect the remainder of Q3 to actually bring in the delayed traditional ‘summer sluggishness’ in activity levels.
“Nonetheless, we expect transactions to gather momentum again throughout Q4 2016 and into 2017, providing there are no external shocks affecting the market sentiment.”
He added: “The growing pool of investors and end users who have been waiting on the sidelines for the last few quarters for sales prices to find their new floor are slowly going ahead with their buying instructions as the prices have hit a plateau across most of Dubai’s submarkets and are showing resistance to further drops.
“Furthermore, landlords who wish to sell in this bottoming market are also keeping realistic reserve prices, thus bridging the gap and pushing transaction volumes up.”