| In sales terms, 2019 was as expected due to the supply in the market. For the past year, the majority of new off-plan launches have been far less than previous years and the new Developer launches have been more affordable in terms of payment plans, waived fees and pricing. Dubai was included for the first time in the UBS Cheif Investment Office yearly report which reported that Dubai had the most ‘fairly’ valued property across the globe alongside Milan, Boston, and Singapore, remaining Cities remained ‘overvalued’ including New York, LA, London, and Sydney. Taking a look at 2018 vs 2019 with data gathered from propertymonitor.ae, 2019 saw an increase in most areas of sales from 2018. The most notable was the increase of secondary sales of townhouses/villas, Investors tend to steer away from investing in villa/townhouses as the return on investment is not as hgh when leasing an apartment, so these figures could prove that more end users are buying than in 2018. Properties priced under a million Dirhams still dominate the property market and average prices of off-plan saw an increase as opposed to the secondary market. |
| 2018 vs 2019 |
| Supply |
| We can expect 2020 to be much the same as 2019 with regards to supply to the market which will in turn potentially see a further drop in prices, particularly for villas/townhouses. Jumeriah Village Circle has seen the most development in the past 2 years and 2020 will see a further 4,779 units expected to be delivered. As you can see by the below graph which I collated, 2021 and 2022 will have a substantially lower supply than previous years, if the Emirate keeps growing in residents the future does not look as bleak as reported. Even if the Developers do continue to launch they will not be able to build quickly enough to impact the next two years supply giving the market time to fully recover. |
Developer’s
Residential Leasing
Leasing data is still tough to get hold of but propertymonitor.ae, using their network of agents, gather as much as possible. As you can see below the average price of a studio apartment to lease in the last two years is around AED47,000 and a one bedroom s AED77,000 which still leaves a healthy 5-6% net return on most developed areas. Bearing in mind the average rate of return in most other major Cities is 1-3% Dubai is still and continues to be the most profitable return on a property.
Tenant Migration
Taking data from DEWA (Dubai Water and Electricity Authority) move in and move out requests we can see that in 2018 there was a shift of more than 2,300 additional tenants in Dubailand, 1,295 tenants to International City, 13,878 to Dubai Silicon Oasis and a negative shift of 10,310 out of Dubai Marina/JBR. This is to be expected as the majority of tenants will move around due to price reductions. ie. Dubai Marina to Palm Jumeirah – Sharjah/Ajman to International City – international City – Dubai Silicon Oasis.
2019 saw Arjan have an increase of 741 tenants which is mostly due to new developments completing, Town Square for the same reason 1,435 tenants and Dubai Silicon Oasis an additional 3,203.
A decrease in tenants can also show tenants becoming end-users as the population of Dubai has consistently increased and currently stands at 3,354,273.
Properties Wanted
| For Lease – Dubai Marina/JBR all types unfurnished For Sale – 2 bedroom Dubai Marina AED1.4m budget, cash buyer For Sale Type, E left Side Shoreline Palm Jumeirah For Sale – Palm villas – Garden Homes mid/high number For Sale Greens/Marina Pinnacle – AED600k budget |
| I wanted to take this opportunity to wish you all a happy new year ahead and please do not hesitate to contact me for any property related questions or inquiries. Laura Adams |