‘Time to buy property in Dubai is right now’, says JLL
Dubai residential property prices to rise 4-5% in 2017, particularly in affordable areas such as Silicon Oasis, Discovery Gardens, Motor City
By Parag Deulgaonkar arabianbusiness.com
Wednesday, 23 November 2016 9:20 AM
Dubai’s residential property market is set to rebound next year with prices expected to increase by 4 to 5 percent, Craig Plumb, head of research, MENA, JLL, told Arabian Business.
The price recovery will mostly be seen in “affordable” housing communities such as Dubai Silicon Oasis, Motor City and Discovery Gardens.
Market reports released last week said affordable housing sector was “outperforming” the luxury segment in 2016 though property prices were declining across the board. Average residential values fell 2.6 percent in third quarter 2016, Cluttons, a real estate consultancy firm, said.
“The market is down almost 15 percent from its peak in 2014. We expect prices to decline by another one percent by year-end, but prices will increase by four to five percent next year,” Plumb said.
A five percent increase will force investors to pay an additional $8,856 (AED32,500) for one-bedroom apartments in Silicon Oasis and Discovery Gardens, as average listing price today stands at $177,112 (AED650,000).
“The time is now right to buy property in Dubai as prices have bottomed out,” Plumb said.
Consultancy Core Savills said last week that the highest sales transaction levels were registered in low- to mid-market segment this year, with almost 46 percent of transactions priced below AED1 million. Peripheral communities such as Dubai Silicon Oasis, Dubai Sports City and Dubailand will account for 50 percent of total new stock, with prices ranging between $217,984 (AED800,000) and $408,719 (AED1.5 million), it added.
While Dubai’s property market is one of the best regulated markets in the Gulf region, a senior Dubai Land Department (DLD) official, while speaking at panel discussion at Big 5 event, said over-regulations will not be good for the market.
“Our role is to support the industry and support the market rather than drive it really. I think we are seeing a more mature market, better regulations, more informed decision making from the investors… so we are not seeing what we saw in 2007 where people were buying and no one knew where the plots where, if there was an escrow account and lot of other things,” Khodr Al-Dah, Director – Technical Department, DLD, said.
“On other hand, we have seen more regulations [come] which is welcome, but we have to be careful not to over-regulate which will stifle investment,” he added.
In July, DLD said property transaction values declined 12.4 percent to $30.79 billion (AED113 billion) in the first half of 2016 from $35.15 billion (AED129 billion) same period last year. However, the department’s Instagram account revealed total transactions during November 13-17 week alone touched $1.36 billion (AED5 billion).